The Bank of Ghana (BoG) has been recognized by President Nana Addo Dankwa Akufo-Addo at the National Honours and Awards 2023, for the distinguished roles it played during the fight to contain the Covid-19 Pandemic.
Specifically, the Bank had to immediately trigger its emergency support clause under Section 30 of the Bank of Ghana Act, 2002, Act 612, as amended by purchasing a GH¢10 billion Covid-19 bond to support the government’s Covid-19 policy responses.
This was contained in a statement issued by the Bank.
“Bank of Ghana also provided an amount of GH¢10 million to the National Covid-19 Fund as seed money, which enabled the Fund to meet some critical health and social needs of those impacted by the pandemic. Also, the Bank, in partnership with the private sector, provided a GH¢10 million grant (in line with the Bank’s corporate social responsibility), to fast-track the construction of the Infectious Disease Centre at the Ga East Government Hospital, which became the nerve centre for managing the Covid-19 pandemic,” it added.
The Bank expressed its gratitude to the President for the recognition of these unconventional policy measures, which were borne out of the quest to support the government’s programme to preserve lives and ensure a safe and stable environment for economic growth.
According to the statement, recently, however, the Bank has taken notice of public discussions on its role in helping resolve the current economic crisis, which raises concerns about their understanding and workings of monetary policy doctrines.
“Since 2020, Central Banks all over the world have witnessed significant changes in the conduct of monetary policy due to the persistence of enormous shocks to the global economy. The spillover effects of these shocks were severe and costly, but have tendered to be grossly underestimated in the narrative of current economic developments in Ghana. Whilst it is the case that the key function of monetary policy is price stability and maintaining the value of money, periods of crisis management, such as the Covid-19 pandemic, have come with dynamic and pragmatic policy response functions by central banks globally. In the face of the unprecedented pandemic shock, Central banks were placed at the forefront and acted in concert with fiscal authorities to take swift and forceful actions to preserve human lives.
“In recognition of timely responses to the crisis, Central banks formed a critical line of defence, with critical policies to prevent market dysfunction and acted prudently in their capacity as lenders of last resort. Not only did most central banks cut interest rates but they also injected large amounts of liquidity to ensure financial stability amid an economic and health crisis. Different tools were deployed to achieve objectives during the crisis short-term instruments, lending to financial institutions, outright purchases of government bonds, and regulatory and supervisory actions on the financial institutions,” it explained.
It indicated that the lessons learnt from the Covid-19 policy responses provided the Bank with a blueprint in 2022 when the government lost access to the capital market and financing critical government spending became challenging.
“This second crisis was again managed prudently with central bank support to prevent disorderly defaults in debt service payments and help government machinery from grinding to a halt. This was done alongside working with the International Monetary Fund to craft a programme to resolve the economic crisis that faced the country. Under such circumstances, all Central Banks would have reprioritised their objectives for the ultimate good of society,” it added.
As a Central Bank, it stated, we have always acted in good faith to the benefit of Ghana, and we are confident that the economy will return to the path of stability and stronger growth sooner rather than later.
Patience Anaadem, ISD
