Credible domestic policies accountable for Ghana’s quick recovery from Covid-19- Addison
Dr Ernest Addison, Governor of the Bank of Ghana, has attributed credible domestic policies for the economy’s great resilience and speedy return to growth path despite the ongoing coronavirus outbreak.
He said the economy, like others around the world, was not spared the devastating effects of the pandemic but was able to absorb the shock better because of homegrown policies in both fiscal and monetary policy frameworks. He said this while speaking at the 10th edition of the Ghana Economic Forum in Accra, organized by the B&FT and themed: ‘Strengthening homegrown policies to underpin the national digitisation drive and shared financial prosperity.’
Dr Addison mentioned the National Financial Inclusion Development Strategy (2018-2023), the Digital Financial Services Policy (2020-2023), and Cash-Lite Ghana (Building an Inclusive Digital Payments Ecosystem) as among the initiatives that helped the economy endure the pandemic shock.
These policies, he noted, have aided the digitalization of financial services in the pursuit of a cash-lite policy and an inclusive economy goal, as well as growth.
“The relatively strong performance of the economy in spite of COVID-19 was due to homegrown policy credibility that had been earned over four years of economic reform. The Fiscal and Monetary Policy Framework that was implemented provided a solid anchor to disinflation.
Policy credibility engendered investor confidence which underpinned the significant inflow of capital, both portfolio and direct, during this period. These measures placed the Ghanaian economy in a good place prior to the pandemic and the necessary policy space to undertake the countercyclical policies that allowed the economy to stay on course,” he said.
As a result, he said, the Bank of Ghana’s gauge of short-term economic dynamics shows that economic activity has been steadily increasing since the fourth quarter of 2020.
Due to the pandemic, the country’s actual gross domestic product (GDP) growth slowed to 1.7 per cent from 6.5 per cent in 2019, but it is already showing signs of resuming its development path. The Ghana Statistical Service, for example, reported 3.9 per cent GDP growth in the second quarter.
Beyond the second quarter, the governor stated that the central bank’s newest high-frequency indicators suggest some optimism for a more robust recovery from the pandemic.
He added that the Composite Index of Economic Activity (CIEA), which expanded by 20% year over year in July 2021, compared to a 3.9 per cent rise the previous year, is evidence of the economy’s strength.
Dr Addison went on to say that the national budget for the following year should be utilized to reset fiscal policy in order to build a more credible path to medium-term fiscal sustainability.
“This would be an important building block to establish and entrench credibility, a key component to stability,” he said.
Source: Richard Mensah Adonu | Join our Telegram Group
