New Bank of Ghana Governor Johnson Asiama has reflected on two institutional areas he believes the central bank can further strengthen: “The transparency of our decision-making process and the communication of our forward-looking guidance.”

In his opening remarks at his maiden Monetary Policy Committee Meeting following his appointment as the new Governor of the central bank, Dr Asiama said on Monday, 24 March 2025: “There’s a growing sense in public commentary that MPC decisions are taken 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.”

Similarly, the Governor noted: “We need to work on simplifying the way we present forecasts so the public and market participants can better understand the underlying policy story.”

These changes, in his view, “will strengthen our credibility and deepen trust in the policy framework.”

Turning to the macroeconomic context in which the meeting was being held, Dr Asiama acknowledged that “while inflation is easing, it remains uncomfortably high, at over 23 per cent, and progress has been slow, particularly on a month-on-month basis.”

For instance, he pointed out, “Structural drivers of food inflation remain persistent.”

Additionally, he said “the external environment, though currently supportive, is becoming increasingly volatile,” noting: “We’ve seen a strong trade surplus and solid reserve build-up on the back of gold exports and remittance flows. But a possible escalation in global tariff wars, rising geopolitical tensions, and weakening Chinese demand could quickly shift the dynamics.”

These global factors, he warned, “could also have spillover effects on inflation, capital flows, and exchange rate stability.”

Domestically, the Governor said “The 2024 fiscal outturn was expansionary, with the deficit exceeding program targets,” observing: “We have seen encouraging signs of consolidation early in 2025, but questions remain as to whether current measures are adequate to anchor expectations and satisfy upcoming IMF programme reviews.”

Also, he said financial conditions are evolving quickly. “Liquidity in the system has increased, commercial banks have raised concerns about the CRR framework, and we must carefully assess its macro-financial implications—especially with respect to inflation, foreign exchange demand, and credit growth. While private sector credit is recovering in nominal terms, real credit growth remains modest.”

Dr Asiama mentioned that banks are “still cautious, and NPL levels remain a concern.”

Meanwhile, he noted that the microfinance and rural banking sectors are showing “early signs of stability, but recapitalisation and regulatory reforms must continue to preserve confidence.”

“We must also acknowledge that some of today’s challenges stem from earlier monetary and fiscal policy missteps—particularly loose fiscal policy during periods of macro stress, weak monetary fiscal coordination, and delays in key structural reforms,” he added.

He said: “These contributed to elevated 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.”

Apart from that, he noted: “There are also deeper, structural issues we must not lose sight of—such as underinvestment in agriculture, persistent exchange rate misalignments, and the need to deepen domestic financial markets.”

“These are outside the scope of today’s immediate rate decision, but they will shape the broader monetary policy landscape over the medium term. In short, we are facing a convergence of risks: stubborn inflation, elevated liquidity, soft real interest rates, a fragile fiscal recovery, and growing external uncertainty. But we also have buffers—strong reserves, improving sentiment, and the credibility of our policy framework—to guide us.”

He said the task over the next few days will be “to weigh these developments rigorously, and to reach a policy stance that reinforces the disinflation path without undermining the recovery or destabilising market expectations.”