A year into his tenure, Bank of Ghana Governor Dr. Johnson Pandit Asiama says calm has gradually returned to Ghana’s financial markets after the turbulence triggered by the Domestic Debt Exchange Program (DDEP) and the broader economic downturn.
In the period immediately after the DDEP, the problem was not a lack of ideas or policy tools. It was confidence. Market players questioned signals, coordination across institutions was strained, and uncertainty shaped behaviour. As the Governor put it, “The challenge at the time was not the absence of ideas or instruments. It was the erosion of confidence in signals, in coordination, and in the consistency of policy implementation.” That loss of confidence showed up in volatile markets, hesitant capital flows and investors unwilling to price assets with conviction.
Faced with that reality, the central bank chose restraint over urgency. Rather than rushing to stimulate growth, the Bank of Ghana focused on restoring credibility, paying close attention to policy sequencing and consistency. Inflation, which stood above 23 percent at the start of the year, was steadily brought down into single digits by November. The progress was not cosmetic. It reflected tight monetary conditions, disciplined liquidity management and clearer communication that helped anchor expectations across the financial system.
Just as important was what the Bank did not do. It resisted pressure to ease policy too early, waiting until price stability had clearly taken hold before acting. When easing eventually came, it was measured, resulting in a cumulative 1,000-basis-point reduction in the policy rate. The timing sent a strong signal: decisions were rule-based, not reactive. During the height of uncertainty, Dr. Asiama noted, “Market behaviour reflected uncertainty rather than conviction; and in such an environment, even well-intended actions struggled to gain traction.”
As confidence improved, the effects became visible. The cedi appreciated by more than 20 percent over the year, reversing earlier depreciation pressures that had fed inflation and weakened balance sheets. This was not the result of short-term controls, but of stronger fundamentals, more credible policy signals and the gradual return of portfolio flows. For businesses and financial institutions, currency stability restored the ability to plan, price contracts and manage risk with greater certainty.
The fixed-income market offered another clear sign of recovery. Trading volumes more than doubled, reflecting deeper participation and renewed investor willingness to engage with government securities after the DDEP shock. The rebound did not happen by chance. It followed sustained engagement between the central bank, market operators and investors, reinforcing the idea that credibility is built not only through policy decisions but also through transparency and dialogue. As the Governor told bankers, “You were not observers of policy during the period; you were participants in it.”
Underlying the turnaround was a deliberate effort to align policy formulation, operational execution, communication and market conduct. Rather than chasing headline results, the Bank focused on reducing uncertainty and restoring predictability. “These outcomes reflected deliberate coherence across policy, operations, communication, and market conduct,” Dr. Asiama said, stressing that credibility is fragile and cumulative, earned through consistency over time rather than one-off interventions.
Looking ahead, the Governor was clear that restored confidence is only the starting point. Stability, he said, must now translate into productive growth. “If 2025 was the year confidence was rebuilt, then 2026 must be the year that confidence is put to work.” For banks, that means deeper intermediation, stronger support for the real economy and a shift from defensive balance sheet management toward long-term value creation.
For the wider business community, the lesson is equally clear. In a global environment still shaped by uncertainty, Ghana’s experience shows that credibility remains one of the most valuable economic assets. Predictable systems, credible institutions and steady leadership influence investment decisions as much as incentives do. As Dr. Asiama concluded, “The next phase of growth will reward systems that are predictable, institutions that are credible, and leadership that is steady.”
In the end, 2025 was defined less by spectacle than by steadiness. After a period of severe disruption, the Bank of Ghana’s approach reinforced a simple lesson for markets and institutions alike: confidence returns when policy is predictable, communication is credible and stability is treated as a long-term obligation, not a short-term goal.
