Ghana`s banking industry needs stronger, dynamic systems… To withstand 2nd phase of global economic meltdown
The First Deputy Governor of the Bank of Ghana (BoG), Dr. H.A.K Wampah, has stated that Ghana's banking industry needs to take a strong and dynamic banking system with the support of fiscal consolidation, to survive the current global economic melt down.
He said, essentially the country's banking system needs to closely monitor areas of vulnerabilities, adding that “Players need to act promptly to shore up the resilience of our economies as the dynamic impacts emerge.”
This comes at a time when some industry players are calling for the review, or better still, the removal of the current monetary policy used in checking or determining the rise and fall of inflation in the country.
Dr. Wampah added: “The emphasis is on scaling up risk monitoring, while raising the minimum capital requirements of financial institutions to improve their liquidity and solvency positions, to enable them encounter effectively any such unexpected shocks in the future.”
He was making this observation at a two-week opening ceremony of the West African Institute for Financial and Economic Management (WAIFEM) workshop, in collaboration with the International Monetary Fund (IMF), which is sponsored by the Japan government, held in Accra.
The institution, which was established by the central banks of Ghana, Gambia, Liberia, Nigeria and Sierra Leone in 1996, is aimed at building the capacity for improved macroeconomic and financial management in constituent member countries.
On the part of member countries of WAIFEM, Dr. Wampah said that member countries need to continually build capacity, and also adapt strategies on the way forward, to ensure economic stability and financial soundness for growth.
The First Deputy Governor of the BoG advised member countries to focus on containing the adverse effects of the crisis on economic growth and poverty, while preserving the important and hard-won gains of sustainable debt levels, lower inflation, stablilise exchange rates, progress with liberalisation of trade and structural reforms.
Prof. Akpan H. Ekpo, Director General of WAIFEM, said the two-week course was to equip the participants with the relevant tools for the formulation and implementation of macroeconomic and financial policies that are needed to ensure growth, stability and poverty reduction.
Prof. Ekpo said the course would cover an examination and analysis of the linkages between the different macroeconomic sectoral accounts, application of forecasting techniques, and modeling of a case study.
Meanwhile, a look at some of the recent macroeconomic indicators of these countries shows that there has been a significant deterioration in the fiscal and external fronts in most countries; inflation rates have edged up since last year in all countries in the zone apart from the Gambia, even though real GDP growth remained robust last year. Exchange rates have also come under severe pressure in all countries, while the external reserves have fallen precariously low in some of the countries, with the exception of Sierra Leone.