Dr Johnson Asiama and Dr Zakari Mumuni have officially taken office as the Governor and First Deputy Governor of the Bank of Ghana, respectively. President John Mahama presided over the swearing-in ceremony at the Jubilee House on Tuesday, 25th January, where the new governors took the Oaths of Allegiance, Office, and Secrecy.
President Mahama used the occasion to urge the new administration to learn from past mistakes, particularly highlighting the detrimental effects of irresponsible fiscal policies on public confidence. He also criticized decisions made by the Central Bank under the leadership of Dr Ernest Addison in the previous administration, specifically referencing the controversial banking sector clean-up.
In his inaugural address, Dr Asiama outlined six key reform areas aimed at enhancing transparency and effectiveness in monetary policy implementation to revive the economy and stabilize the Ghanaian cedi. The proposed reforms include:
1. Discontinuing the Use of Differentiated Cash Reserve Requirements and Relying on Open Market Operations (OMOs) to improve communication between the Central Bank and commercial banks on regulatory matters.
2. Preserving Exchange Rate Stability and Limiting Excessive Volatility through enacting a new foreign exchange law, implementing targeted market operations, deepening Ghana’s participation in the Pan-African Payment and Settlement System (PAPSS), and introducing structured and transparent systems in the forex markets.
3. Realigning the Regulatory Mandate to Promote Greater Financial Intermediation and Economic Growth by enforcing strict prudential regulations and updating the Banks and Specialised Deposit-Taking Institutions Act (Act 930).
4. Boosting Financial Inclusion and Innovation to Promote Inclusive Economic Growth through introducing a digital strategy, supporting initiatives that expand access to financial services, collaborating with banks, startups, and international partners, and developing a regulatory framework for digital assets.
5. Enhancing Fiscal and Monetary Policy Coordination by strengthening the independence of the Bank of Ghana and engaging constructively with the government and key stakeholders.
6. Reversing the Bank of Ghana’s Negative Equity Position by reassessing non-core operations, implementing cost-cutting measures, and developing a strategy to restore the Bank’s negative equity to a positive position in the medium term.
Dr Asiama reiterated his commitment to ensuring that the Bank of Ghana plays a crucial role in restoring economic stability, safeguarding financial institutions, and fostering economic growth in Ghana. The new administration is poised to implement these reforms to address the challenges facing the Ghanaian economy and build a sustainable financial future for the country.
