Governor of the Bank of Ghana Ernest Addison stated that the institution should be commended for its ability to withstand setbacks and sustain the economy through the crisis of 2022.
Speaking at the Governor’s Day event of the Chartered Institute of Bankers, Dr. Addison praised the central bank’s role in keeping the economy from collapsing under the weight of the crisis.
He pointed out that since the global financial crisis of 2007–2008, central banks all over the world have had to reassess their missions and have backed fiscal policy to act as a countercyclical force in stabilizing economies.
Dr. Addison clarified, “Central banking has never been the same” as a result.
“Before the financial crisis, the quintessential task of central banks was straightforward: keeping inflation within a tight range through the control of short-term interest rates”.
He also noted that “in a world of polycrisis, central banks have found themselves broadening monetary policy formulation beyond interest rates to include the deployment of balance sheets in a variety of unconventional monetary policies” .
He emphasized, “Therefore, the crisis revealed a gap between theory and practice.”
In fact, he stated, “all that Bank of Ghana did as various shocks hit the economy was consistent with prudent crisis management.”
He claimed that during the 2020 pandemic, the central bank backed budget financing to safeguard lives and means of subsistence.
“In the 2022 economic and liquidity crisis, the central bank would not have acted differently but played its role as an automatic stabilizer to avoid pushing the economy to a tipping point which possibly could have spilled into social upheavals as was the case in Sri Lanka” he added.
“It is very clear that only a central bank that has been prudently running, built buffers, and well-positioned, can step in to support an economy from collapse”.
“It is, therefore, most appropriate, I believe, to state that Ghanaians should rather applaud and commend the resilience of the Bank of Ghana”, he stated.
The minority caucus organized a protest in October of this year, urging the Governor and his two deputies to resign for mismanaging the central bank.