First Deputy Governor’s Keynote Address at Regional Course on Macroeconomic Management
Source: bank_of_ghana
Date: 2011-09-12

1 OPENING CEREMONY OF THE REGIONAL COURSE ON MACROECONOMIC MANAGEMENT AND FINANCIAL SECTOR ISSUES, ACCRA, GHANA KEYNOTE ADDRESS BY DR. H. A. K. WAMPAH, DEPUTY GOVERNOR, BANK OF GHANA DATE: SEPTEMBER 12 - 23, 2011 VENUE: ERATA H OTEL Director General of WAIFEM, Prof. Akpan H. Ekpo, Course Facilitators from the IMF Distinguished Guests, Course Participants, Ladies and Gentlemen, 1. It is my pleasure to join you at the opening ceremony of this course. The Governor of Bank of Ghana would have loved to be present at this gathering to perform this very im portant function. However, he is unavoidably absent. He extends his most heartfelt welcome to every one of you, and wishes you all a most re warding experience here in Accra, Ghana. He anticipates that at the end of it all, th is meeting of minds will result in the way forward for economies in the sub-region. 2. Let me thank the International Monetary Fund (IMF) for their collaborative efforts with WAIFEM in organizing these training courses and for helping to sustain such efforts in building capacity in the sub-region. This course in particular, focuses on some of the most important macroeconomic policy issues confronting authorities in developing economies, and the options available to policymakers in these countries, 2 with special emphasis on how financ ial sector issues interact with macroeconomic management. 3. As the Director General said in his welcoming remarks and from a cursory look at the work program, it is obviously an integrated workshop with topics ranging from moneta ry policy frameworks, managing international capital flows, macr oeconomic challenges in African economies, exchange rate regimes, fisc al policy, management of aid flows, remittances and natural resource reve nues, debt sustainability, financial sector development, financial sound ness indicators, financial sector supervision and regulation, financial ma rket structure, financial crises, and macro-prudential supervision. I am certain that the team from the IMF Institute will cover these issues in great detail to make your two-week course a rewarding experience. 4. Ladies and Gentlemen, the econ omies of advanced countries continue to grapple with fiscal and sovereign debt problems as the world economy experiences sluggish recovery from the 2008 financial and economic crisis. As you will recall, the crisis had significant economic and social consequences evidenced by a drop in real activity, corporate bankruptcies, and a rise in unempl oyment. However, in sub-Saharan Africa, official assessme nts suggest that, while recovery rates have been uneven, aggregate economic growth is projected to average 5.5 percent in 2011 and a further 6 perc e n t i n 2 0 1 2 . F o r e x a m p l e , i n m o s t o f t h e 3 countries and especially among the seve n oil exporters, growth is said to be almost back to pre-crisis levels. 5. It is also reported that progress towards achieving the MDGs has been stalled by the effect of the sharp increases in food and fuel prices in recent times that continue to exert pressure on poor households. It is further projected that the impact of recent price shocks coupled with the surge in growth could lead to rising inflation in the outlook. In addition, countries that import fuel could also experience worsening current account imbalances. It is therefor e anticipated that monetary policy in many cases will be leaning towards tightening in the outlook. 6. In Ghana, the latest information on the economy, suggests a stable outlook. According to our recent asse ssment, the exchange rate continues to experience relative stability whil e inflation expectations remain well anchored. Based on the maiden release of quarterly GDP series for the first quarter, and trends in Bank of Gh ana’s Composite Index of Economic Activity for the first half of 2011 the overall medium-term outlook for growth remains positive. 7. Ladies and gentlemen, even as we experience relatively faster economic recovery, there are othe r macroeconomic challenges. Of particular reference is the gradual surg e in private capital inflows to many countries in the sub region, particularly to the frontier markets as part of the global resurgence in portfolio flows. 4 8. The challenge is to strengthen th e policy environment and design appropriate macroeconomic and structural policies to sustain the pace of recovery while stemming the potential inflationary pressures as well as the potentially destabilizing effects of capital flow reversals and their implication for competitiveness. This calls for a strong commitment to ensure financial stability within a properly structured framework of macro p r u d e n t i a l p o l i c y . W e h a v e l e a r n t f r o m t h e 2 0 0 8 e c o n o m i c c r i s i s t h a t financial stability is a necessary co ndition for macroeconomic stability. Besides, one cannot have sustained economic growth without financial stability, and any disruption in the financial system anywhere in the world has the potential of affecting the real economy not only in that country but elsewhere. 9. Ladies and Gentlemen, my task this morning is not to pre-empt the lecture discussions, but simply to draw attention to the need for effective macroeconomic management and financ ial sector policies to stem the emerging risks from the global economy that coul d impact our respective local economies and that of the sub-region as a whole. I am mindful of the intense training programme ahead of you and your desire to commence the technical sessions immediately. However, before I leave the podium, let me urge you all to apply yourselv es assiduously to the discussions and exercises in the course for the benefit of your organizations and countries. I also enjoin you all to vi sit some of the attraction s in Accra to make your stay here enjoyable. 5 10. On that note, Ladies and Gentlemen, it is my privile ge and singular honour to declare the regional course on Macroeconomic Management and Financial Sector Issues open. I wish you all a rewarding experience and I thank you for your attention.