Governor’s Short Remarks at Bank of Ghana End of Year Cocktail
Source: bank_of_ghana
Date: 2023-12-15

1 END OF YEAR COCKTAIL SHORT REMARKS BY DR. ERNEST ADDISON GOVERNOR, BANK OF GHANA 14 DECEMBER 2023 2 Your Excellency, the President of the Republic, Nana Addo Dankwa Akufo-Addo, Honourable Minister of Finance, Mr. Ken Ofori Atta Board Members of the Bank of Ghana and GhIPSS Members of the Financial Stability Council CEOs of Banks, GDPC, CSD and Other Financial Institutions Directors of the Bank of Ghana and the Ministry of Finance Distinguished Guests Ladies and Gentlemen. 1. It is a great pleasure and honour to host you to this short reception marking the end of what has become a very eventful year for the Bank and the financial sector. I believe you agree with me that we have a lot to be thankful for as another challenging but fulfilling year gradually draws to a close , and how best to end the year than to have an announcement today of the biggest drop in inflation this year, now at 26.4 percent. Let me first thank the President of the Republic , Nana Akufo-Addo for accepting to be a Special Guest for this evening’s reception. 2. As I said at the recent dinner of the Chartered Institute of Bankers, central banks have had to re-evaluate their mandate since the global financial crisis and supported fiscal policy to play a countercyclical role in stabilizing economies. In the present “poly-crisis” world, 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. Through effective collaboration with the Ministry of Finance, the Bank of Ghana has formulated monetary policies to keep the economy steady. 3. Ladies and Gentlemen, the policy mix under the IMF --supported PC-PEG programme is gradually yielding positive results. From the peak of 54.1 percent in December 2022, headline inflation has declined to 35.2 percent in October 2023 and today it has fallen to 26.4%. I kept on reminding people that inflation was at 12.7% in December 2021 and what 3 we saw in 2022 should not be used to judge us. As you are aware there has been considerable noise from our detractors who have celebrated the high inflation recorded in 2022. Today we are vindicated that inflation in 2022 was just a blip and we are quickl y returning to where we were before the crisis. 4. The country’s external sector position has also improved in the year, alongside some build- up in foreign exchange reserve buffers which has provided some stability in the foreign exchange market. 5. The high frequency economic indicators monitored by the Bank has continued to improve, signalling the likelihood of outperforming the GDP growth projection for the year. 6. Distinguished Guests, the financial sector has remained relatively stable and sound amid the series of shocks in the past six years. Prudential data in the year to October 2023, show profitability of banks has remained relatively strong, and the Capital Adequacy Ratio, adjusted for the regulatory reliefs, was also higher than the revised prudential minimum. The evidence is clear that the economy is responding well to the policy initiatives that have been put in place. 7. The Bank of Ghana has invested heavily in technology to correct some of the weaknesses we inherited with data integrity by Banks that misreported leading to failures in Banks and other SDIs in 2016. A new Suptech tool, the Online Regulatory Analytic Survei llance System (ORASS) has been developed and completed this year and our staff have worked with our technology partners to develop tools that support the entire supervisory cycle from licensing to resolution. The ORASS is a major reform using technology to enhance our oversight of the financial system and we are the first African Central Bank to develop such a system. We have had Central Banks come from South Africa, Egypt , Barbados, Zambia and Solomon Islands to learn from us. 4 8. We have also been working to deepen the digitization drive in the economy, including the development of a Central Bank Digital Currency (CBDC). This evening , after the successful eCedi pilot, the Bank will announce the winners of the recently organised eCedi Hackathon to encourage and potentially leverage on the local CBDC innovation, exchange knowledge, and build partnerships. Out of 88 applications from students, programmers, FinTechs, bankers, engineers, and FinTech enthusiasts, etc. 66 were selected for the hackathon. Of this, 10 finalists have been shortlisted . We will be announcing the winners immediately after this reception at the Kempinski hotel and invite all of you to attend. 9. We want to thank His Excellency the President, and the entire cabinet for the strong leadership exhibited which has helped to turn the fortunes of our economy. 10. To conclude, 2023 has been challenging but fulfilling. We are confident about the economic outlook and expect to see significant improvement in the operating environment for businesses in 2024. 11. Let me once again thank you all for your attention. I wish you all Merry Christmas and a Happy and Prosperous New Year in advance.