World Bank lauds BoG for independence and effective policy reforms

The World Bank has commended the Bank of Ghana’s independence in its latest Country Policy and Institutional Assessment (CPIA) report, noting that it has been instrumental in the success of policy reforms aimed at reducing inflationary pressures on the Ghanaian economy.

According to the report, the government of Ghana, the Bank of Ghana, and other governments and central banks in sub-Saharan Africa had made significant progress in building credibility, capacity, and transparency, which had led to a strong performance in Central Bank independence.

The report highlighted Ghana’s commitment to policy reforms, which had strengthened the central bank’s independence and enabled it to pursue tight monetary policy, raise reserve ratios, and implement a fiscal reform program that had helped reduce year-over-year inflation from 54% in December 2022 to 23% in December 2023.

The CPIA report also noted that Ghana had made progress in fiscal transparency and responsibility, with the government committing to reinstating its fiscal rule in the medium term and strengthening the independence of its Fiscal Council.

The World Bank Chief Economist for Africa, Andrew Dabalen, emphasized the importance of the CPIA review in identifying areas of relative weakness and engaging in a dialogue around policy reforms that can produce better development outcomes.

The report also highlighted the need to attract and sustain greater private sector investments, particularly in light of high interest rates and public debt.

Overall, the World Bank’s praise for the Bank of Ghana’s independence is a significant endorsement of the country’s economic reforms and its commitment to building a stable and prosperous economy.