US-based Economist Calls for Comprehensive Review of BoG's Inflation Targeting Framework

-

US-based economist, Dr. Dennis Nsafoah, advocates for a meticulous review of the Bank of Ghana's Inflation Targeting (IT) framework, following two decades of moderate success.

Dr. Nsafoah underscores the critical need for a comprehensive evaluation, echoing the sentiments expressed by Vice President Dr. Mahamudu Bawumia. He emphasizes that despite the Central Bank's proactive endeavors—ranging from pioneering digital currency initiatives to bolstering debt sustainability—achieving the fundamental objective of price stability remains a persistent challenge.

Related To This: Fitch Solutions Predicts BoG to Cut Policy Rate to 28% in March 2024

Notably, Dr. Nsafoah points out the absence of a legal obligation in Ghana mandating regular reviews of the Central Bank's mandate, highlighting the imperative for a sweeping reassessment after the IT framework's 20-year trajectory of moderate accomplishments. The esteemed Assistant Professor at the University of Niagara calls upon the incoming government to meticulously scrutinize the Bank of Ghana's mandate in light of evolving economic dynamics.


Reflecting on discussions within Dr. Bawumia's book "Monetary Policy and Financial Sector Reform in Africa: Ghana's Experience," the transition from monetary aggregate-centered strategies to the IT regime is cited as a strategic response to the former's inadequacies in meeting set objectives. 

Dr. Nsafoah accentuates the pivotal role of price stability in underpinning macroeconomic equilibrium, emphasizing its indispensable significance for Ghana's economic resilience and every citizen's financial well-being.

Related To This: BoG To Reduce Policy Rate by 8% to 22% in 2024 - Fitch Reports

Dr. Nsafoah contends that the onus lies with the Bank of Ghana to preserve price stability, as delineated in section 3 of the Bank of Ghana Act 2022 (Act 612), where maintaining general price level stability stands as the primary objective. Despite the formal adoption of an IT framework in May 2002 as a mechanism to secure price stability over the medium term, Dr. Nsafoah urges a critical reevaluation to fortify the Bank of Ghana's efficacy in fulfilling its mandate.

Within this framework, governmental collaboration aligns with the Central Bank in defining medium-term inflation targets, charging the Bank of Ghana with the mandate of employing policy instruments to realize these objectives. 

Comments

Post a Comment

Popular posts from this blog

AFCON 2023: Cape Verde Beats Ghana To Top Group B

-
Image
Gary Rodrigues emerged as the hero for Cape Verde, scoring a late goal in added time to secure a 2-1 won over Ghana in their opening game at the 2023 Africa Cup of Nations (AFCON). After this back-and-forth match, the outcome left Ghana reeling and considering their next course of action. Related To This: AFCON 2023: The Outcome Was Really Disappointing To Us - Chris Hughton on Losing To Cape Verde Drama erupted early in the match as Jameiro Monteiro scored Cape Verde's first goal in the 17th minute after Richard Ofori tripped. To the delight of their supporters, Cape Verde held their lead throughout the first half despite Ghana's relentless play in the final third. The contest saw Majeed Ashimeru's disallowed goal, as Ransford-Yeboah's involvement was deemed offside, denying Ghana the chance to level the score early on. However, the Black Stars entered the second half with renewed vigor, with Djiku scoring the equalizer from a corner. Djiku continued to play a heroic ...
Read more

Former US Officials Reaffirm Strong Support for Taiwan Following Presidential Election

-
Image
(Photo Credit: cnn) Despite China's threats, former top US officials flew to Taiwan to reiterate Washington's unwavering support for the island after it chose a president Beijing loathed. Lai Ching-te, the leader of the Democratic Progressive Party (DPP), was elected to an unprecedented third term in government. Beijing was outraged by this, and ties between the US and China were strained as a result. Related To This: Nauru Cuts Ties with Taiwan and Recognizes China While visiting Taiwan, former US national security advisor Stephen Hadley congratulated the island nation on its election triumph and hailed its democracy as a "shining example for the world". Hadley emphasized that the next administration will uphold the United States' strong commitment to Taiwan and the two nations' ongoing partnership. (Photo Credit: cnn) Congratulating Lai and the people of Taiwan, US Secretary of State Antony Blinken emphasized the robustness of Taiwan's democratic system...
Read more

Parliament Summons Transport Minister Over Extra $20 Charge at KIA

-
Image
Minister for Transport, Kwaku Ofori Asiamah, has been called to provide urgent explanations to Members of Parliament (MP) regarding a purported new charge imposed by the Ghana Airport Company (GACL) as maintenance fees. Related To This: British Airways Engages With Government on High Operating Costs At KIA Effective May 1, 2024, passengers traveling through Kotoka International Airport in Accra will be mandated to pay a $20 fee for maintenance purposes and to assist in covering the costs of baggage belt repairs. A letter from the management of GACL to the Chairperson of the Airport Operators Committee of Kotoka International Airport revealed the introduction of a new fee for departing travelers. Dated March 11, 2024, and signed by the Managing Director of Ghana Airports Company Limited, Yvonne Nana Afriyie Opare, the letter outlined that the fee would apply to all round-trip tickets. Alongside the announcement of the $20 round-trip airline ticket fee, GACL specified that $10 of the fe...
Read more