Accra: The Bank of Ghana has announced a strategic shift in its economic policy, prioritizing resilience over the attraction of foreign capital inflows. This comes as emerging economies face increasing challenges due to geopolitical tensions, inflation risks, and tighter global financial conditions.
According to Ghana Web, First Deputy Governor Dr. Zakari Mumuni addressed these issues during the 64th ACI Financial Market Association World Congress in Accra. He emphasized that the previous era characterized by abundant global liquidity has changed significantly, exposing countries with weak fiscal and institutional structures to greater financial instability. Dr. Mumuni highlighted that while capital flows offer opportunities, they also pose significant risks to emerging markets.
The remarks by Dr. Mumuni coincide with a global reassessment of growth and inflation prospects, spurred by escalating tensions in the Middle East. These tensions have disrupted trade routes, increased oil prices, and created uncertainties across financial markets. The International Monetary Fund has already adjusted its 2026 global growth forecast down to 3.1 percent from 3.3 percent and warned of potential further downgrades if the conflict persists.
Dr. Mumuni noted that higher interest rates in advanced economies, particularly in the United States, are drawing capital away from emerging markets, heightening refinancing risks and exchange-rate pressures. He stressed the need for emerging economies to focus on building institutional credibility and reserve buffers to withstand external shocks.
He outlined five strategic priorities for emerging economies: fiscal credibility, reserve adequacy, stronger financial sector regulation, institutional depth, and attracting productive long-term capital. Dr. Mumuni emphasized the importance of viewing reserve adequacy as a form of self-insurance, distinguishing between long-term investments and volatile portfolio flows.
These comments align with the Bank of Ghana's recent policy approach to maintain macroeconomic stability amid external risks. Ghana's domestic economic indicators have seen significant improvement, with the Composite Index of Economic Activity expanding by 12.6 percent year-on-year in March 2026.
Inflation has edged up slightly, with headline inflation at 3.4 percent in April, marking the first increase since December 2024. Meanwhile, reserve money growth slowed to 3.6 percent in April, and broad money supply growth moderated to 22.2 percent. Falling domestic interest rates have supported a rebound in private-sector credit, with average bank lending rates declining and real private-sector credit growth recovering.
The banking sector has also strengthened, with total industry assets and the capital adequacy ratio both increasing. Despite these improvements, the non-performing loan ratio remains a concern, though it has declined from previous levels.
On the external front, Ghana's current account surplus has widened, supported by strong export earnings and stable remittance inflows. Gross international reserves have risen, but the cedi has depreciated against the U.S. dollar due to energy-sector demand and corporate dividend outflows.
Dr. Mumuni concluded by stating that countries maintaining disciplined fiscal and monetary policies while strengthening institutions will likely navigate future global financial challenges successfully. He underscored the importance of discipline, consistency, and long-term commitment to achieving these goals.