The Bentsi-Enchill, Letsa & Ankomah law firm has held the third Kojo Bentsi-Enchill (KBE) Memorial Lecture focusing on the history and evolution of monetary policy in Ghana and its impact on economic development.
The lecture honours the memory of the late Kojo Bentsi-Enchill, a visionary, who contributed significantly to the transformation of law practice in Ghana.
The annual lecture series aims to foster dialogue on critical national issues by bringing together academics, legal professionals, government officials, and technocrats.
The lecture was on the theme: “The Evolution of Monetary Policy in Ghana and its Impact on Economic Development,” It focused on Ghana’s monetary policy, addressing the often-complex area that plays a crucial role in the country’s economic stability, particularly in light of the current economic downturn and challenges.
Mr Ivor Agyeman-Duah, a Renowned Historian, delved into the various theories that underpinned the development of monetary policy in Ghana and its evolution.
He said the lecture aimed to clarify the often-misunderstood topic, particularly amidst Ghana’s current economic challenges, fuelling various speculations among the public.
Mr. Agyeman-Duah said monetary policy, which involves actions taken by a nation’s central bank to regulate the money supply, aimed to achieve specific economic goals.
These goals are controlling inflation, managing interbank lending rate levels, and maintaining financial stability.
He said there were different models used across the world to meet these public interest goals.
Mr Agyeman-Duah said regardless of the model implemented, monetary policy plays a crucial role in the economy and had far-reaching implications on its overall stability and growth.
He said inflation control, exchange rate, financial market stability, credit availability, and economic growth were factors that impact monetary policy.
The lecture set the stage for a panel discussion which featured Dr. Maxwell Opoku-Afari, the First Deputy Governor of the Bank of Ghana; Dr. Priscilla Twumasi-Baffour, a Senior Lecturer at the Department of Economics of the University of Ghana; and Mr. Agyeman-Duah.
Dr Priscilla Twumasi-Baffour, a Senior Lecturer at the Department of Economics at the University of Ghana, argued that strong coordination between fiscal policy and monetary policy was required to deliver the intended results of controlling inflation and addressing currency volatility.
She said if the fiscal policy handled by the executive arm and the monetary policy seem not to speak to each other as expected operationally, then regulation may be needed to enforce that.
The Lecturer said the Ghanaian economy could not continue as it had since independence, relying on imports and exporting raw materials, yet expect different outcomes solely through changes in monetary policy.
“Even though the country’s monetary policy models have changed over the years to the current model of ‘inflation targeting, the economy is still importation reliant, inflation is still high and the currency is volatile. We need to move into value addition and industrialisation,” she said.
Dr. Maxwell Opoku-Afari, the First Deputy Governor, said price stability was the core mandate of the Central Bank and its monetary policy objective is to achieve that.
He reiterated that the current inflation targeting model helped to focus on every sector of the economy in policy implementation.
He said this had resulted in the recording of the highest growth without volatility and the longest period of stability in currency.
The Deputy Governor said monetary policy alone could not solve all the problems in the economy in terms of price control and needs other policies functioning collaboratively.
The panel indicated that transitioning from the export of raw materials and an import-dependent economy to the export of value-added goods was a vision that must be carried out by the executive to diversify the economy.
Former President John Agyekum Kufuor, who graced the event, urged the public to refrain from attacks on the Bank of Ghana, warning that such actions could have severe economic consequences.
He said the executive arm of government was the central brain of economic and fiscal policies and should be held accountable for economic challenges rather than undermining the Central Bank’s independence, which could lead to instability and erode investor confidence, ultimately harming the economy.
Mr. Divine Letsa, who chaired the event, said: “The KBE Memorial Lecture series is dedicated to honouring Kojo Bentsi-Enchill’s legacy by exploring critical issues affecting our nation.”
She said they believe that by examining monetary policy’s impact, “we can contribute to informed decision-making and economic stability.”
GNA