The new Bank of Ghana Governor, Dr. Abdul-Nashiru Issahaku and deputy, Dr. Johnson Asiamah have been sworn in by President Mahama. I have the following expectations of them.
1. Commit to control inflation and keep it under 10%. Inflation of 19.2% is simply unacceptable. Dr Issahaku should make bringing down inflation his top priority.
2. Restore confidence in the microfinance sector. The collapse of DKM and other microfinance firms has affected the confidence of would-be savers. The new BoG governor has to do better with regulating the activities of the non-bank financial institutions better than his predecessor did.
3. Control lending to government. The BoG’s net financing of government is expected to reach zero. It’s important that Dr Issahaku resists government pressure to finance the deficit.
4. Keep an eye on exchange rates. The BoG must ensure that they maintain the confidence of foreign investors since they own so much of our debt. If they withdraw their monies en masse the cedi will suffer.
5. Reduce risk in banking sector. Non-performing loans in the banking sector are at 14.1%. That is too high. I know banks increased capital in order to be able to absorb defaults. This should continue under the new governor.
6. Improve communication. The Central Bank of Nigeria is on twitter. There is no reason why the BoG cannot take advantage of new channels of communication to educate people about their duties and activities.
I wish Dr Issahaku and his team all the best.