The Governor of the Bank of Ghana, Dr. Johnson Asiama has announced a major shift in the operations of the monetary policy committee to enhance transparency and win the trust of the public.
Dr. Johnson Asiamah says the bank, starting from this month, will commence the publication of the views and justifications of every individual member of the monetary policy committee after their meeting and subsequent press conference.
The governor reveals that the conventional practice, where decisions are presented as an unanimous action, does not enhance transparency. He discloses that there are always divergent views among the committee members in relation to the direction of the monetary policy rate, hence the need for the public to know what each member thinks and the underlying justifications.
Dr. Asiama, who says he is on a mission to enhance the public trust and confidence in the Central Bank, believes it is imperative that this initiative is implemented to bring the different perspectives to light.
Speaking at the concluding session of the National Economic Dialogue, he indicated the publication of the individual views of the members is an opportunity for other stakeholders such as the private sector, media, and the academia to understand the reasoning behind the policy decisions.
“You notice that, up to now, you don’t get to hear why individual members opted for whether the rate should stay the same, or should be increased, or be lowered. You don’t get to hear that. All that we hear is, it is an unanimous decision. But in actual fact, there are divergent views, you know, through those sessions. What we are going to be doing now is, individual members’ submissions will be published,” he announced.
He added, “you will get to understand the basis for which actions were taken. And for me, that is at the core of what we do. We want the academia, we want the media, we want the private sector themselves to understand that we are in the same boat.”
Dr. Asiama stressed that monetary policy choices are not arbitrary but are based on careful risk assessments.
“Sometimes you need to increase the rates, not because you don’t want to see lower lending rates. You want to see lower lending rates, but where there is a risk, for example, to the exchange rate or inflation path, then you have to go on that tangent,” he explained.
By ensuring that individual MPC members are held accountable for their positions, the Governor hopes to foster trust and alignment between policymakers and the broader economy. He also hopes to hold regular engagements with private sector organisations to explain Central Bank decisions on key issues including the monetary policy rate.
He assured that this new found openness will enable businesses and investors to make more informed decisions, strengthening Ghana’s economic governance. Meanwhile the Central Bank will conduct a value for money audit on its $230 million new head office building. Dr. Asiama told Parliament that AESL will be used to conduct the exercise.
