Dr Asiama proposes 2 reforms to bring MPC closer to the public

Governor of the Bank of Ghana (BoG), Dr. Johnson Pandit Asiama, has proposed measures to enhance transparency in the decision-making process of the Monetary Policy Committee (MPC).
According to him, there is a growing perception that MPC decisions are made behind closed doors without clear, data-driven reasoning.
“To counter this, I am proposing that we implement mechanisms to make the Committee’s decision factors more accessible—whether through publishing voting outcomes or enhancing the narrative content of our policy statements,” Dr. Asiama stated. He also emphasized the need to simplify economic forecasts to enable the public and market participants to better understand the policy direction.

Inflation remains a challenge
Despite a gradual decline, inflation remains high at over 23 percent.
The month-on-month progress has been slow, with persistent structural drivers of food inflation continuing to exert pressure.
“The external environment, though currently supportive, is becoming increasingly volatile,” Dr. Asiama warned.
Ghana has benefited from a strong trade surplus and a buildup of foreign reserves, mainly due to gold exports and remittance flows.
However, global uncertainties, including trade tensions, geopolitical risks, and weakening demand from China, pose a threat to economic stability.

Fiscal and financial sector concerns
Domestically, the 2024 fiscal outturn was expansionary, with the deficit exceeding programme targets.
Although early 2025 has shown signs of fiscal consolidation, Dr. Asiama questioned whether current measures were sufficient to meet upcoming International Monetary Fund (IMF) program reviews.
Liquidity in the banking system has also increased, raising concerns among commercial banks regarding the Cash Reserve Ratio (CRR) framework.
Dr. Asiama stressed the need to assess its macro-financial implications, particularly concerning inflation, foreign exchange demand, and credit growth.
“While private sector credit is recovering in nominal terms, real credit growth remains modest. Banks are still cautious, and non-performing loans (NPLs) remain a concern,” he noted.
However, he expressed optimism about the microfinance and rural banking sectors, which are showing early signs of stability, provided that recapitalization and regulatory reforms continue.

Addressing past policy missteps
Dr. Asiama acknowledged that some of the current challenges stem from previous monetary and fiscal policy missteps.
Loose fiscal policies during periods of economic stress, weak monetary-fiscal coordination, and delays in structural reforms have contributed to high inflation, impaired policy transmission, and a loss of credibility.
“It is essential that we reflect on these issues—not to assign blame, but to strengthen our institutions and avoid repeating past mistakes,” he said.
He also highlighted deeper structural issues such as underinvestment in agriculture, persistent exchange rate misalignments, and the need to deepen domestic financial markets.
While these are not directly related to the immediate monetary policy decision, they will shape Ghana’s economic landscape in the medium term.

Navigating economic uncertainties
Dr. Asiama concluded by emphasizing the complex challenges ahead, including stubborn inflation, elevated liquidity, fragile fiscal recovery, and growing external risks.
However, he remained confident that Ghana has strong buffers, including robust reserves, improving market sentiment, and a credible policy framework.
“Our task over the next few days is to rigorously weigh these developments and reach a policy stance that reinforces the disinflation path without undermining the recovery or destabilizing market expectations,” he stated.
With these proposed measures, Dr. Asiama hopes to instill greater confidence in the MPC’s decision-making process and ensure that monetary policy remains a credible tool for stabilizing the economy.