Ghana’s economy is beginning to show early signs of stability following recent policy interventions, but significant risks remain, Governor of the Bank of Ghana, Dr. Johnson Asiama, said at the opening of the 124th Monetary Policy Committee (MPC) meetings.
Speaking at the Bank Square in Accra, Dr. Johnson Asiama noted that while macroeconomic indicators are improving, the path to full recovery is still complex and vulnerable to both domestic and global shocks.
“We convene at a time when Ghana’s macroeconomic conditions are exhibiting early signs of stabilization,” he said, citing improving fundamentals and policy discipline.
“However, the path ahead remains complex and fraught with risks.”
One of the key indicators of progress, he highlighted, was the continued moderation in inflation. Data from the Ghana Statistical Service shows that inflation dropped to 21.2% in April 2025. Although this marks a significant decline from previous highs, it remains above the medium-term target band of 8 ± 2%.
In response, the MPC raised the policy rate by 100 basis points to 28% in March. Dr. Asiama said this move has begun to dampen inflationary pressures.
“Preliminary evidence suggests this action has contributed to dampening inflation momentum,” he said.
Adding to the optimism, the Ghanaian cedi appreciated by nearly 19% between April and May supported by improved market sentiment, prudent monetary policy, and gains in the external sector.
“This appreciation has helped ease imported inflation pressures and restore public confidence,” Dr. Asiama explained.
He also pointed to broader macroeconomic progress, including a staff-level agreement with the International Monetary Fund (IMF) on the Fourth Review of the Extended Credit Facility (ECF) Programme and an S&P upgrade of Ghana’s sovereign rating from Selective Default to CCC+.
“These developments affirm the progress being made,” he said, adding that external reserves have strengthened, the trade balance has improved, and consumer and business confidence is on the rise.
Despite these gains, Dr. Johnson Asiama warned of persistent risks. Inflation remains susceptible to food supply constraints, particularly from northern Ghana and the Sahel, as well as global price shocks and geopolitical tensions.
He also referenced U.S.-led tariff disputes as a factor that could disrupt financial flows to emerging markets.
To strengthen monetary policy transmission, the Bank of Ghana is shifting from reliance on the unremunerated Cash Reserve Ratio to a more active Open Market Operations regime, including the use of longer-tenor instruments.
The governor emphasised the importance of the Committee’s upcoming decisions, urging members to assess whether the current policy stance remains adequate to drive disinflation without jeopardizing fragile economic recovery.
He concluded by underscoring the significance of clear communication through the post-meeting communiqué.
“It must articulate the rationale behind our policy decisions and provide an accessible, transparent account of recent economic trends,” he said.
