The Bank of Ghana (BoG) is seeing early signs of a shift in credit flows toward the private sector and away from government borrowing, a development it says is critical for growth and poverty reduction, BoG Governor Dr. Johnson Pandit Asiama said at the 128th Monetary Policy Committee (MPC) press briefing.
Responding to questions at the MPC meeting, Dr. Asiama said recent policy decisions were aimed at reinforcing financial intermediation rather than directing credit or foreign exchange through administrative controls, stressing that Ghana’s FX and credit markets remain market-based.
“So, as usual, I would like to take the last one first. What policies, whether Bank of Ghana has a policy to prioritize our FX intermediation, that’s what you’re asking, that we should be going more for intermediates and goods, etc. Yes, that makes sense,” he said.
However, he noted that FX allocation is driven by market mechanisms rather than central bank targeting. “But you know, what we have is a market-based system. And banks, the auction affects the banks. And so, based on the documentation of the bank, all effects will transfer freely.”
Data from Ghana’s balance of payments already show that imports of intermediate goods are holding up better than consumer goods, a trend Dr. Asiama described as encouraging. “However, the data shows that consumer goods and imports are lower than intermediate goods and imports,” he said, adding that this supports productive activity rather than consumption-led demand.
On whether recent easing would translate into cheaper credit or stoked inflation, Dr. Asiama said policy had remained cautiously tight and well managed.
“Well, no,” he said. “If you notice throughout, the policies that we have, this is the we kept a little more tight. However, we were sterilizing at the same time.”
He said sterilisation costs had been contained, allowing the central bank to preserve stability while supporting growth. “That opportunity, our policy states, we need that stance to be able to move, to be able to take the gains. But that’s it. You also need to support real sector growth.”
Dr. Asiama noted that banks are increasingly redirecting lending toward the private sector, with reduced exposure to government borrowing. “And it is encouraging. We are beginning to see banks move towards lending to the private sector. We are seeing some reduction when it comes to lending to the public sector. That is encouraging because that is real financial intermediation.”
According to him, the MPC’s decisions are intended to reinforce this shift. “What the MPC is doing here is to reinforce that transition is good for growth. It is good for poverty reduction in the end.”
Addressing concerns over Ghana’s gold holdings, which have declined to 18.6 tonnes, Dr. Asiama said the change reflects a deliberate portfolio rebalancing rather than a weakening of reserves.
“At the last MPC, I remember we spoke about a rebalancing of our portfolio,” he said. “We observed that most of them were holding within 20 and 25 % of their portfolios as gold. At the time, we were holding a little over 40 %. And so a decision was made to diversify.”
He noted the reallocation has generated returns and continues to support reserves. “But the effects that was aimed as a result is there. It is earning dividends. And so it is contributing to reserve accumulation.”
Dr. Asiama added that reserves are on an upward path and that gold accumulation would resume. “And so no worries at all. And as you are aware, we are building all the time. We are rebuilding all the time.”
While acknowledging that gold prices have surged to record levels, he cautioned against assuming the rally will persist. “It is true gold prices have risen to record levels, way above 5,200, I’m told… what you see at 5,200 may be more of transitory factors.”
On the Bank of Ghana’s 2025 accounts, Dr. Asiama reiterated that the central bank is not profit-oriented and that operational costs must be assessed in the context of its mandate.
“Our mandate is to ensure price stability. Our mandate is to ensure financial stability. Now, in carrying out this mandate, yes, you will incur costs,” he said, citing monetary policy operations, revaluation effects and gold-related expenses.
He confirmed ongoing consultations with government following recent amendments to the Bank of Ghana Act, which provide for periodic recapitalisation. “There’s a provision in there for governments to recapitalize, you know, the Bank of Ghana from time to time,” he said.
“And so government is committed to recapitalize us, or more or less to strengthen our balance sheet, you know, going forward,” Dr. Asiama added, saying the central bank would remain policy-solvent while serving the public interest.
On issues raised by Parliament’s Public Accounts Committee, Dr. Asiama said the requested data had been submitted shortly after the engagement. “We have provided those numbers to them about a day or two after we left there,” he said, adding that the matter had been resolved.
Dr. Asiama said the MPC remains focused on sustaining macroeconomic stability while ensuring that monetary policy increasingly supports productive investment and long-term growth.
