The Bank of Ghana’s Monetary Policy Committee has begun its second meeting for the year 2025, amidst concerns over the impact of international economic developments on Ghana’s economy.
According to Kojo Oppong-Nkrumah, Member of Parliament for Ofoase Ayirebi and Ranking Member on the Committee of the Economy and Development, the Governor of the Bank of Ghana has expressed worries about the increasing volatility in the external environment.
“The external environment is currently supportive, but it’s becoming increasingly volatile,” the Governor stated.
“We have seen a strong trade surplus and solid reserve build-up, but this is largely due to gold exports and remittance flows.”
Kojo Oppong-Nkrumah noted that the Governor of the Bank of Ghana has made some remarks and issued a statement ahead of the meeting.
He quoted the Governor as saying, “The external environment is currently supportive, but it’s becoming increasingly volatile.”
Oppong-Nkrumah observed that the Governor acknowledged that Ghana has seen a strong trade surplus and solid reserve build-up, but noted that this is largely due to gold exports and remittance flows.
Oppong-Nkrumah stated that the Governor warned about the potential risks to Ghana’s economy.
“He says but there’s a possible escalation in global tariff wars, rising geopolitical tensions, and weakening Chinese demand, and it could quickly shift the dynamics, i.e., the way the economy is gradually turning around could quickly be reversed because of global factors,” he quoted the Governor as saying.
The Governor also noted that these global factors could have spillover effects on capital flows and exchange rate stability.
Oppong-Nkrumah observed that the Governor’s concerns highlight the need for careful consideration of the potential impact of international economic developments on Ghana’s economy.
“What the governor is saying is that because of the things that are happening on the international economic stage, it could affect the progress that we have made on disinflation, bringing inflation further down, cost of living that I always tell you about, on capital flows, and on the currency, and they are worried about it as they are going into the MPC meeting,” he stated.
Oppong-Nkrumah concluded by saying that the Governor’s concerns are valid and that the decisions made by the Monetary Policy Committee will have a significant impact on Ghana’s economy.
“These are the things that will inform the decisions that they make, we’ll look out for the decisions that they make, and we’ll spend some time talking about it,” he said.
The Governor warned that the progress made in disinflation could be reversed due to global factors such as a possible escalation in global tariff wars, rising geopolitical tensions, and weakening Chinese demand.
These global factors could also have spillover effects on capital flows and exchange rate stability, the Governor noted.
As the Monetary Policy Committee meets to decide on the MPC rate, which will, in turn, affect interest rates, the Governor’s concerns highlight the need for careful consideration of the potential impact of international economic developments on Ghana’s ececonomy.
The Bank of Ghana’s Monetary Policy Committee plays a crucial role in shaping the country’s economic policy, and its decisions have a significant impact on the lives of Ghanaians. As the committee meets to deliberate on the MPC rate, all eyes will be on the outcome, and how it will affect the economy.
In recent years, Ghana’s economy has faced significant challenges, including a decline in economic growth, high inflation, and a significant depreciation of the cedi.
The Bank of Ghana has implemented various measures to stabilize the economy, including increasing the MPC rate to combat inflation.
However, the Governor’s concerns about the impact of international economic developments on Ghana’s economy highlight the need for continued vigilance and careful management of the economy.
-BY Daniel Bampoe
