Economist and Professor of Finance, Godfred Alufar Bokpin, has advised the Bank of Ghana to reposition itself to support the productive aspects of the economy, rather than merely mopping up liquidity when necessary.
He urged the central bank to intervene in government decisions and actions to mitigate the harsh economic effects of exchange rate fluctuations.
The Graphic Business joins in this call as we believe the leadership transition at the Bank of Ghana presents a crucial opportunity to reimagine the central bank's role in the country’s economic development.
For too long, the Bank of Ghana has primarily focused on traditional monetary policy tools – managing inflation through interest rates and liquidity control.
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While these remain important functions, they have proven insufficient to address Ghana's complex economic challenges. The stark reality of our 23.8% inflation rate as of January 2025, despite aggressive monetary tightening, suggests we need a more comprehensive approach.
The central bank's decision to support the government with GH¢77 billion in 2022, while controversial, demonstrates its potential to intervene decisively in economic matters.
However, such interventions must be redirected toward productive sectors rather than fiscal patches.
Professor Bokpin's call for the BOG to actively support agricultural modernisation and irrigation systems represents the kind of strategic thinking we need as a country.
Ghana's persistent foreign exchange challenges stem primarily from structural supply limitations rather than excess demand. This reality demands a fundamental shift in the central bank's approach.
Instead of merely managing currency fluctuations, the BoG must actively participate in building the economy's productive capacity. This could involve creating targeted financing programmes for export-oriented industries and supporting technological advancement in key sectors.
However, any transformation of the central bank must address internal challenges first. The reported excessive operational costs at the BoG are unsustainable and undermine its credibility.
The new governor must demonstrate fiscal responsibility by streamlining operations and ensuring transparency. Additionally, the identified weaknesses in the banking sector require urgent attention, necessitating stronger collaboration with financial intelligence units to combat corruption and fraud.
The current IMF programme provides both a framework and an opportunity for this transformation. While the programme emphasises macroeconomic stability, it should not prevent the BoG from adopting a more proactive developmental role.
Other emerging economies have successfully balanced these imperatives, and Ghana must find its path to do the same.
The challenges facing Ghana's economy – from high inflation to currency depreciation and limited productive capacity – require bold, innovative solutions.
The traditional playbook of tight monetary policy and passive market oversight has shown its limitations.
As we move forward, the Bank of Ghana must evolve into an institution that actively supports economic transformation while maintaining its core stability mandate.
Dr Asiama's tenure will be judged not just by inflation statistics but by how effectively the central bank contributes to Ghana's broader economic development.
This means building a more resilient financial sector, supporting productive investments, and helping to create an economy that works for all Ghanaians.
The path forward requires careful balance. The BoG must maintain its credibility while expanding its role in economic development.
It must support government initiatives without compromising its independence. Most importantly, it must help build an economy that can generate sustainable growth and weather external shocks.
The stakes are high. Ghana's economic future depends significantly on getting this transition right.
As Professor Bokpin suggests, the time has come for the Bank of Ghana to embrace a new structure and form – one that positions it as an active participant in Ghana's economic transformation rather than just a passive guardian of monetary stability.