An economist on the Kwame Nkrumah College of Science and Know-how (KNUST), Kumasi Prof. Mohammed Hadrat Yusif, has referred to as for sweeping reforms to Ghana’s financial coverage framework, together with granting operational independence to the Financial institution of Ghana (BoG).
Based on him, such reforms are important to restoring macroeconomic stability and supporting long-term nationwide improvement.
Delivering his Professorial Inaugural Lecture, Prof. Yusif examined Ghana’s financial coverage historical past and its persistent structural weaknesses.
The lecture, titled “Financial Coverage in Ghana: Revisiting the Tobin’s Mannequin,” traced the financial divergence between Ghana and peer international locations like South Korea and Malaysia, nations that have been at comparable ranges of improvement at independence however have since outpaced Ghana in progress and stability.
“Ghana’s financial coverage has failed. Inflation is excessive, debt ranges are unsustainable, and the infrastructure wanted for sustainable improvement stays insufficient,” he acknowledged.
Prof. Yusif noticed that though the BoG was established in 1957 to stabilise costs, handle alternate charges, and management cash provide, Ghana continues to face important financial challenges.
He cited a pointy rise in public debt as proof of coverage failure. Home debt as a share of GDP, he famous, rose from 35% in 2016 to 90% in 2024, whereas exterior debt elevated from 20% to 50% in the identical interval.
In 2024, Ghana’s inflation stood at 22.5%, in comparison with charges beneath 2.5% in international locations like South Korea, Malaysia, and Singapore.
Prof. Yusif partly blamed the scenario on what he described because the Ministry of Finance’s dominance over the central financial institution, which he argued undermines the BoG’s independence.
“The Financial institution of Ghana must be allowed to function free from political interference. Financial coverage should be appropriate with the broader macroeconomic targets of the nation,” he stated.
Amongst his proposals have been a shift from inflation concentrating on to nominal GDP concentrating on, a assessment of the Fiscal Accountability Act (2018) and the Financial institution of Ghana Act (2002), and better funding in analysis and improvement.
He additionally referred to as for deeper collaboration between the BoG and tutorial establishments corresponding to KNUST to assist evidence-based coverage making.
Prof. Yusif underscored the significance of public-private partnerships for infrastructure improvement, accountable gold and cocoa manufacturing, and stronger assist for small and medium enterprises (SMEs), particularly within the context of the Africa Continental Free Commerce Space (AfCFTA).
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