The second Deputy Governor of the Bank of Ghana (BoG) has stated that even though economies around the world will face difficult times, Ghana will overcome its challenges as the right policies are put in place.
Elsie Addo Awadzi citing the International Monetary Fund’s (IMF) prediction that there may be a global recession in 2023 noted that developing countries like Ghana are in a unique position to take advantage of the situation to accelerate economic development.
She was speaking at the 21st annual Chief Executive Officers Conference for Rural and Community Banks in Ho, in the Volta Region.
“Just yesterday, the IMF released its latest numbers on the global economy and the outlook for 2023 is a global recession. The whole world’s economy is in trouble”, she stressed.
She added that the “large unusual threat from the Covid-19 pandemic, the Ukraine-Russia war, from the unprecedented levels of inflation.
“Even in the advanced economies talking about 10%, 11% inflation which used to be a developing country’s phenomenon, today in the US, the EU, the UK are struggling with it and you see interest rates, as a result, rise very high, in their 20s”.
She asserted that the development had resulted in the financing of emerging and developing economies as “almost non-existence”, adding that investors would pick developed economies such as America and Europe for businesses in quest of higher yields.
Mrs Awadzi disclosed that her outfit is working with the Ministry of Finance and other key stakeholders to conclude discussions with the IMF towards a Reform Program that would help transform and restore the country’s economy.
“We at the Bank of Ghana are confident about the outlook for our economy. The current high inflation and Cedi depreciation are temporary and we must avoid speculative behaviour that only works against attaining stability sooner,” she advised.
She also entreated rural and community banks to leverage technology to improve service delivery as they remain essential players in the banking industry, and continue to provide critical financial services to micro, small and medium-sized enterprises and individuals.
She detailed that to enhance operations of the rural and community banks, the Finance Ministry and the Bank of Ghana had decided to support the upgrade of the ARB Apex Bank’s e-banking platform and the modernization of the management information system of the rural and community banks.
This, she said, forms part of the Financial Sector Development Project aimed at ensuring efficient service delivery to the ever-demanding customers.
“Digitalisation comes along with its own complexities and risks, including cyber security risks, third and fourth party/outsourcing risk, data privacy breaches, technology failure risk, increased AML/CFT risks, and consumer protection risk among others. Needless to say, a lot is required by way of strong governance and risk management systems to help mitigate these risks, as financial institutions seek to exploit the benefits of digitalisation.
RCBs will therefore need to augment their capital base as needed in order to deploy more sophisticated systems and structures in line with the Bank of Ghana’s 2018 Cyber and Information Security Directive. The Directive provides for the adoption of minimum technical, governance, data protection protocols, and transaction monitoring and fraud detection and mitigation tools, to help mitigate key risks from digitisation”, she said.
