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Available data from the Bank of Ghana indicate that the Ghanaian economy is recovering in line with other multinational and international research institutions.
According to the Governor of the Bank of Ghana, Dr. Ernest Addison, this can be attributed to evidence of some green shoots in economic activity that had recovered to pre-shutdown levels.
Speaking at the University of Ghana alumni conference on the topic “Pandemic, Economy and Outlook, he said business sentiment has also improved, although the index remained below pre-closing levels.
“Our latest high-frequency economic indicators, such as consumer spending, industrial electricity consumption and construction activities, have reached pre-closing levels. Just yesterday, the Ghana Statistical Service released an estimate of GDP (Gross Domestic Product) growth for the third quarter, suggesting that the economy contracted by 1.1% during the third quarter. It should be noted that this is consistent with the vision of a rebound since the economy recovered from a contraction of 3.1% to 1.1% during the quarter ”, he emphasized.
The governor also said that a recent report from the International Growth Center (IGC) corroborates this view, as employment rates and hours worked per adult, which fell substantially in March and April, have largely returned to their previous levels. to Covid in August and September.
Banking sector
In the financial sector, Dr. Addison noted that the banking sector remains liquid and well-positioned to support growth, benefiting significantly from recent reforms.
“To a large extent, policy interventions have also helped improve the health of the banking sector and reduced the potential adverse side effects that the banking sector may have had on the macro-financial landscape. The sector remains robust, as reflected by strong indicators of financial strength: capital adequacy levels are above regulatory limits, the delinquency rate has decreased and profitability remains strong. “
On the impact of covid-19 on the sector, he said the findings revealed that overall, the banking sector is robust and largely resistant to shocks related to the pandemic, adding that tail risks arising from the changing The macroeconomic outlook has had a moderate effect and the banking sector’s robustness index has improved from pre-pandemic levels.
“Overall, the early political response to the COVID19 pandemic, including freezing dividend payments, lowering the cash reserve requirement, and lowering the policy rate, helped the sector to build reserves to withstand shocks. credit ”, he mentioned.
Post-COVID outlook
The governor said the stage is set to redesign a medium-term macroeconomic framework to return the economy to fiscal consolidation and further consolidate macroeconomic stability.
He believes this will provide an essential lever to put the Ghanaian economy on a path of higher growth, job creation and a faster pace of poverty alleviation.
Public debt levels have increased after the necessary fiscal expansion in the short term to contain the impact of the pandemic [covid-19].
He explained that there is a need to design a plan to reduce debt to sustainable levels to contain the risks posed for future budget financing, exchange rate stability, and post-Covid-19 financial sector stability.
