Associate Professor of Economics and External Member of Bank of Ghana’s Monetary Policy Committee, Prof Festus Ebo Turkson, has called for discussions surrounding the Bank of Ghana’s monetary policy decisions and financial losses to be handled without political bias, insisting that the central bank’s interventions during Ghana’s economic crisis delivered benefits that outweigh the costs.
Speaking on TV3’s The Key Points programme, Prof Turkson said the role of the Bank of Ghana remains unchanged regardless of which political party is in government, stressing that the institution exists primarily to maintain economic stability.
According to him, the central bank’s mandate includes ensuring price stability, safeguarding financial stability, maintaining exchange rate stability and sustaining the country’s balance of payments position.
“The Bank of Ghana remains the Bank of Ghana, no matter which government is in power,” he said, adding that the central bank should be viewed like a “fire service” institution tasked with responding to economic crises rather than causing them.
Prof Turkson explained that the economic challenges confronting Ghana since the 2022 crisis required decisive policy actions from the central bank, including measures that contributed to losses and negative equity on the Bank of Ghana’s books.
However, he argued that the country’s focus should shift from political blame to structural economic reforms aimed at preventing similar crises in the future.
“We need to discuss what we need to do as a country to change the structure of our economy to ensure that these losses that we see on the books of the central bank do not pop up again,” he stated.
The economist further described the Bank of Ghana’s monetary policy role as a “pure public good”, comparing it to government investment in infrastructure projects such as roads that may not generate direct profits but create broader economic benefits.
He maintained that assessments of the central bank’s performance should be based on whether it achieved its policy objectives and whether the economic benefits exceeded the associated costs.
“When you compare that to the cost, the cost that we are discussing now is insignificant relative to the benefits of what a central bank has done during a crisis and at this time as the economy tries to stabilise,” Prof Turkson said.
Touching on inflation management, he noted that it is normal for central banks fighting inflation to incur costs through liquidity mop-up operations and other monetary policy measures.
He explained that when the central bank removes excess liquidity from the market, it pays interest on those instruments, which subsequently affects its balance sheet.
Despite the financial implications, Prof Turkson argued that the benefits of reducing inflation far outweigh the costs.
He pointed to Ghana’s inflation decline from 54 per cent over the past four years to 3.2 per cent as evidence of the effectiveness of the Bank of Ghana’s interventions. “It is something that is very remarkable and we need to celebrate it,” he said.
Prof Turkson added that liquidity management and sterilisation measures are standard central banking practices and should not be interpreted through a partisan lens.
