The Governor of the Bank of Ghana, Johnson P. Asiama, has warned that a prolonged conflict in the Middle East could pose risks to Ghana’s liquidity, despite recent gains in macroeconomic stability.
Speaking at an international conference organised by GEXIM to mark its 10th anniversary, Dr Asiama said the central bank is closely monitoring developments and stands ready to respond if the situation persists.
“For now, our hope is that the crisis will be short-term,” he said. “If it persists, then we will have to design different policy measures.”
His comments come as Ghana navigates external shocks following a period of domestic economic stabilisation, with policymakers wary of the potential spillover effects of global geopolitical tensions.
Dr Asiama explained that upon assuming office, the central bank inherited a fragile macroeconomic environment characterised by high inflation, exchange rate volatility, and excess liquidity.
“It was like having a patient who had received excessive blood transfusion,” he said, describing the scale of liquidity injected into the system in previous years.
To restore stability, the Bank of Ghana implemented aggressive liquidity-tightening measures, mopping up excess cash from the system—a process the governor acknowledged came at a financial cost.
“That has come at a cost… but it was necessary to ensure that our interventions would be effective,” he said.
According to him, the measures have begun to yield results, with inflation easing to about 5.4 percent by the end of the year and the cedi strengthening by around 10.4 percent—an outcome he described as better than expected.
“I knew the cedi could appreciate, but I didn’t know it could appreciate to that extent,” he noted.
Despite these gains, Dr Asiama cautioned that external shocks, particularly geopolitical tensions in the Middle East, remain a key risk to Ghana’s economic outlook.
“These are global economic shocks we have to contend with,” he said.
He, however, assured that Ghana’s economic managers are coordinating closely, with the central bank working in tandem with the Ministry of Finance and other state agencies to safeguard stability.
“Our reserves are comfortable, and we are in sync with other arms of government,” he added. “This is not the first time our economy has faced global shocks—we will pull through.”
The warning underscores Ghana’s continued vulnerability to external developments, even as authorities seek to consolidate recent macroeconomic gains.
