Governor of the Bank of Ghana, Dr. Ernest Addison has reiterated the need for government to develop a new medium-term macroeconomic framework to return the economy unto a path of fiscal consolidation.
The Governor had earlier on raised questions about the sustainability of the implementation of COVID-19 related interventions meant to cushion Ghanaians and businesses against the adverse impact of the global pandemic.
The cost associated with the interventions the governor admitted had pushed Ghana’s total public debt stock to GHS273.8 billion as at the end of September 2020.
Speaking at the recent University of Ghana Alumni Lecture Dr. Addison said whatever framework is developed should include a clear priority towards expenditure rationalization and revenue mobilization.
“At the end of the year, the stage is set to redesign a medium-term macroeconomic framework to return the economy to fiscal consolidation and to further consolidate macroeconomic stability to provide an essential lever for positioning the Ghanaian economy on a path of higher growth, job creation, and faster pace of poverty alleviation.”
“Public debt levels have risen following the necessary fiscal expansion in the short-term to contain the impact of the pandemic. Hence, there is the need to design a plan to bring down the debt to sustainable levels to contain risks posed to future financing of the budget, exchange rate stability and financial sector stability post Covid-19. The framework should include a clear priority towards expenditure rationalization and efficiency, as well as improving revenue collection capacity,” he added.
Constant regulatory and policy attention needed on financial sector – BoG Governor
Dr. Ernest Addison had reiterated the need for constant regulatory and policy attention on Ghana’s financial sector in the coming year to ensure sustained financial stability.
Despite the Bank of Ghana concluding three years of banking sector reforms, which saw an increase in the minimum capital requirement, revocation of licenses of insolvent institutions as well as a complete overhaul of the regulatory and supervisory frameworks for the financial sector the Governor continues to preach vigilance.
According to Dr. Addison his outfit will be putting a lot of effort into identifying warning signals and initiation corrective actions to ensure the financial sector thrives.
“By and large, the economic impact of the pandemic may result in higher non-performing loans and some capital erosion of banks. Hence, the Bank is putting greater focus on identifying the early warning signals and initiating prompt corrective actions.”