New reforms to protect Ghana from another financial crisis - BoG Governor

The Governor of the Bank of Ghana (BoG), Dr Johnson Asiama, has said that a new wave of legislative and policy reforms will act as a crucial safeguard against a repeat of the financial crisis that plunged Ghana into economic distress three years ago.

Speaking at the listing of First Atlantic Bank on the Ghana Stock Exchange, Dr Asiama highlighted recent amendments to the Bank of Ghana Act, approved by Parliament, as central to restoring confidence and strengthening the independence of the central bank.

“These reforms are designed to prevent a repeat of the excesses and structural weaknesses that led to the Domestic Debt Exchange Programme,” he said, noting that complementary measures introduced by the Ministry of Finance are reinforcing Ghana’s macroeconomic framework and laying the foundation for a more resilient and disciplined financial system.

Reflecting on the recent past, Dr Asiama recalled what the World Bank described as a “homegrown crisis,” when inflation surged to 54.1% at the end of 2022, and the cedi lost over half its value between 2022 and 2023. At the time, foreign exchange reserves fell to less than half a month of import cover, marking the lowest level recorded in decades.

“The crisis battered confidence across the financial system,” he said, pointing to the severe impact on capital markets amid fiscal stress and extreme exchange-rate volatility. While the Domestic Debt Exchange Programme was necessary, Dr Asiama noted, it placed significant strain on banks, institutional investors, and capital markets, exposing vulnerabilities in Ghana’s narrowly structured financial system.

“The lesson is clear,” he said. “Sustainable stability requires strong institutions, diversified funding, deep markets, and shared ownership—not just short-term fixes.”

He described Ghana’s recovery as “real, measurable, and meaningful.” Inflation has dropped sharply to 6.3% as of the end of November 2025 and could fall closer to 5% by year-end, potentially the lowest level in many years. The cedi has appreciated by over 24% year-to-date, supported by tighter monetary policy, stronger external buffers, and improved fiscal discipline.

Dr Asiama cautioned against overinterpreting the currency’s performance, noting that the gains followed a 19% depreciation the previous year and largely represent a correction rather than an unsustainable surge. “This is not a real appreciation to be concerned about,” he said, emphasizing that the currency’s strength is anchored in improved macroeconomic fundamentals.

Gross international reserves have risen above US$11 billion, providing close to five months of import cover, while GDP growth reached 6.3% in the first half of 2025, with non-oil growth approaching 8%.

“These outcomes reflect discipline and coordination across policy institutions,” Dr Asiama said, stressing that Ghana’s recovery must now be consolidated through sustained reform.