Professor Ebo Turkson, an exterior member of the Financial institution of Ghana Financial Coverage Committee, says Ghana’s struggle in opposition to inflation after 2022 is not going to achieve success with out important financial prices.
Chatting with JoyNews in a private capability information file He defined on Saturday, Might 2, 2026, that whereas the central financial institution’s financial coverage mandate is a public good, attaining value stability inevitably includes trade-offs.
“The mission of a central financial institution and its financial coverage is a public good. Like constructing a highway, we incur large prices. Any financial coverage {that a} central financial institution undertakes, the target evaluation of that coverage is whether or not it has fulfilled its mission.”
“In fact, financial coverage has prices, so we can’t anticipate central banks to attain this mission with out incurring any prices within the first few years of the disaster in 2022,” he stated.
Professor Turkson burdened that financial coverage ought to be evaluated not on whether or not it avoids financial prices, however on whether or not it meets its mandate, notably in controlling inflation.
He famous that Ghana’s inflation disaster peaked in December 2022, with inflation reaching roughly 54%, forcing policymakers to take aggressive measures to stabilize the financial system.
“On the peak of the disaster in 2022, inflation reached 54%. We wanted to make use of each software out there to deliver inflation down,” he stated.
He stated the Financial Coverage Committee had rolled out strict coverage measures to extract extra liquidity from the financial system via the banking system with the intention of controlling demand-driven inflation in parallel with supply-side pressures.
He defined that this included elevating coverage rates of interest and implementing liquidity mop-up operations, which considerably elevated curiosity prices on the central financial institution’s steadiness sheet.
“When bonds are bought to extract liquidity, the rate of interest is carefully associated to the coverage fee. As we battled 54% inflation, the coverage fee rose and so did curiosity prices,” he stated.
Professor Turkson added that the Financial institution of Ghana has continued its longstanding liquidity administration operations as a part of efforts to revive macroeconomic stability.
His feedback got here because the Financial institution of Ghana reported a lack of GH¢15.6 billion, a improvement that has sparked a renewed nationwide debate over the fee and sustainability of the central financial institution’s financial coverage interventions within the struggle in opposition to inflation.
He argued that though the measures could be expensive, they had been needed to stop the financial disaster from worsening and restore value stability.
