The Bank of Ghana (BoG) has announced that strengthening economic resilience, rather than depending on volatile foreign capital inflows, is now its central policy priority for Ghana. This change addresses geopolitical tensions, rising inflation risks, and tighter global financial conditions that are reshaping international markets.
First Deputy Governor Dr. Zakari Mumuni explained this strategic shift at the 64th ACI Financial Market Association (FMA) World Congress in Accra. He stated that the era of abundant and predictable global money that supported emerging markets has fundamentally changed. This exposes countries with weak government finances and institutions to increased financial instability.
This new focus aligns with broader global economic adjustments. Policymakers worldwide are re-evaluating growth and inflation forecasts following escalating tensions, particularly in the Middle East. These tensions have disrupted global trade routes and increased crude oil prices. The International Monetary Fund (IMF) has already lowered its 2026 global growth forecast to 3.1 percent from 3.3 percent. They warn that continued conflict could lead to further reductions.
Dr. Mumuni highlighted that capital flows, while providing opportunities, also carry significant risks. He stated that higher interest rates in advanced economies, especially the United States, will likely continue to draw capital away from emerging markets. This increases refinancing risks and pressure on exchange rates for developing countries.
For emerging economies like Ghana, these developments have significant implications. Dr. Mumuni noted that global money cycles directly impact exchange rates, how much money a country holds in reserves, its ability to pay debts, borrowing conditions, and overall financial stability.
He emphasized that emerging economies must now focus less on attracting short-term investments. Instead, they should build institutional credibility, maintain sufficient reserve buffers, and develop flexible policies to withstand external shocks. Dr. Mumuni identified five strategic priorities: fiscal credibility, adequate reserves, stronger financial sector regulation, deeper institutions, and attracting productive long-term capital.
“Reserve adequacy must be viewed as a form of self-insurance rather than a luxury,” Dr. Mumuni said. He urged countries to distinguish between valuable long-term investments and unstable portfolio flows that can quickly disappear during difficult times.
These comments reflect the Bank of Ghana’s recent actions to maintain economic stability despite growing external risks. Ghana’s domestic economic indicators have shown sharp improvements recently. For example, the Composite Index of Economic Activity grew by 12.6 percent year-on-year in March 2026, a significant increase from 2.3 percent a year earlier. This growth was driven by stronger private-sector credit, industrial activity, consumption, and trade.
However, headline inflation slightly rose to 3.4 percent in April from 3.2 percent in March, marking its first increase since December 2024. This rise is partly due to concerns over higher global energy prices and potential supply chain disruptions from the Middle East conflict. Despite this, core inflation continued to decrease.
The Bank of Ghana has maintained a tight monetary policy. Reserve money growth slowed significantly to 3.6 percent in April from 38 percent a year earlier. Broad money supply growth also moderated to 22.2 percent. At the same time, falling domestic interest rates have helped private-sector credit rebound. Average bank lending rates dropped to 16.3 percent in April from 27.4 percent a year earlier.
Ghana’s banking sector has also strengthened. Total industry assets grew by 26.6 percent year-on-year to GHS 493.9 billion in April. The capital adequacy ratio improved to 22.3 percent from 17.5 percent. The non-performing loan ratio decreased to 18 percent from 23.6 percent, though high credit risk remains a concern for the central bank.
On the international front, Ghana’s current account surplus expanded to US$3.10 billion in the first quarter from US$2.43 billion a year earlier. This was supported by strong gold and cocoa export earnings and stable money sent home by Ghanaians abroad. Gross international reserves increased to US$14.4 billion by May 18, which is enough to cover 5.7 months of imports.
Despite these improvements, the Ghana cedi has depreciated by 8.4 percent against the U.S. dollar this year. This depreciation is due to demand from the energy sector and corporate dividend payments. Dr. Mumuni concluded that countries that successfully manage future global economic challenges will be those that maintain strict fiscal and monetary policies while building stronger institutions over time.