Ghanaian Times, November 25, 2022
The Governor of the Bank of Ghana (BoG), Dr Ernest Addison, has urged the various African central banks to pursue prudent macroeconomic management supported by growth-oriented policies, for the successful implementation of the African Continental Free Trade Area (AfCFTA).
According to him, high inflation, volatile domestic currencies and weak financial systems were likely to undermine the goals of the AfCFTA.
In a speech read on his behalf at the third CUTS International and GIZ Public Private Dialogue in Accra yesterday, he said the BoG had among other measures, deployed Inflation Target (IT) as the monetary policy framework to anchor inflation expectations which would be critical to the stability of goods and services in a free trade area.
The governor stated that his outfit remained committed to fighting and bringing inflation under control while taking measures to stem the slide in the Ghana cedi.
Touching on the role of financial intermediaries in the promotion of inter-continental trade in Africa, Dr Addison stressed that ensuring stable and resilient financial systems of member countries of the AfCFTA to manage internal and external shock was very necessary.
He mentioned that the process of leveraging technology to digitise the payment landscape could speed the process of digital transformation and enhance the cross-border trade in the AfCFTA as expected.
“Emerging financial technology firms (FinTechs) are driving the digital transformation of financial services across the continent and have provided opportunities to advance the payment and settlement systems which is critical for financial sector development. African central banks can support this drive by building the required financial infrastructure, together with supportive regulatory frameworks,” he added.
He said Ghana’s interoperability platform, which allows direct and seamless transfer of funds from one mobile money wallet to another money wallet as well as links to bank accounts had improved mobile money transactions in the country.
This, he said had created a level playing field for persons with or without bank accounts to conduct financial transactions and “it is rapidly promoting financial inclusion in Ghana.”
In furtherance, he indicated that enhancing interoperability at the continental level would boost access to payment systems in AfCFTA’s member countries while enhancing cross-border trade.
He advised Small and Medium Scale Enterprises (SMEs) to cease the opportunities offered by the AfCFTA to ramp up production and expand trade to other African countries.
A member of the technical team of AfCFTA, Mr Samuel Ato Yeboah, in a presentation bemoaned that the free opportunity presented to African countries to trade with the European Union (EU), was not strongly exploited.
He therefore called on government to create an enabling environment for businesses to thrive, especially by implementing stringent measures to control inflation.
“Without products we cannot trade rather, we will end up importing what others are producing. Consequently, our little foreign exchange will go down the drain due to inflation,” he stressed.
Mr Ato Yeboah touted interventions from international fronts and the government of Ghana, in order to break the poverty cycle faced by SMEs.
“The recent support from the International Monetary Fund (IMF) and the YouStart programme spearheaded by government are some interesting interventions that SMEs are happy about,” he noted.
Professor Godfred Bokpin on his part appealed to banks operating in Ghana to reduce their interest rates so that SMEs could afford to take loans from them to boost their businesses.