Dr Ernest Addison, the governor of Bank of Ghana (BoG), has encouraged the various African central banks to make use of prudent macroeconomic managements supported by growth oriented policies, for the successful implementation of the African Continental Free Trade Area (AfCFTA).
This statement was made when a speech was read on his behalf at the ‘Third CUTS International and GIZ Public Private Dialogue’ in Accra.
According to him, the rise in the average level of prices of goods and services, fall in value of domestic currencies and weak financial systems were likely to undermine the goals of the AfCFTA.
Dr. Addison stated that, the central bank of Ghana, is set to leverage predominant measures, deployed Inflation Target (IT) as the monetary policy framework to anchor inflation expectations, which would be critical to the stability of goods and services in a free trade area.
BoG will remain committed to fighting and bringing inflation under control while pursuing measures to stem the slide in the Ghana cedi, he added.
Dr. Addison also pointed out the need for the role of financial intermediaries in the promotion of inter-continental trade in Africa. Ensuring stable and resilient financial systems of member countries of the AfCFTA to manage internal and external shock was very necessary, he added.
In his speech, he advised that, the process of leveraging technology to digitise the payment landscape could speed the process of digital transformation, and enhance the cross-border trade in the AfCFTA as expected.
“Emerging financial technology firms (FinTechs) are driving the digital transformation of financial services across the continent and have provided opportunities to advance the payment and settlement systems which is critical for financial sector development. African central banks can support this drive by building the required financial infrastructure, together with supportive regulatory frameworks.”Dr Ernest Addison
Dr. Addison further stated that, Ghana’s interoperability platform, which allows direct and seamless transfer of funds from one’s mobile money wallet to another money wallet, as well as links to bank accounts has created a level playing field for individuals with or without bank accounts to undertake transactions. “It is rapidly promoting financial inclusion in Ghana.” he stated.
SMEs Urged To Leverage AFCFTA
Dr. Addison advised Small and Medium Scale Enterprises (SMEs) to take advantage of the opportunities offered by the AfCFTA, to ramp up production and expand trade to other African countries.
Mr Samuel Ato Yeboah, a member of the technical team of AfCFTA, in his presentation expressed that, the free opportunity offered by AfCFTA to African countries to trade with the European Union (EU), was not strongly exploited.
“I call on government to create an enabling environment for businesses to thrive, especially by implementing stringent measures to control inflation.
“Without products we cannot trade, rather, we will end up importing what others are producing. Consequently, our little foreign exchange will go down the drain due to inflation.”Mr Samuel Ato Yeboah
Mr Ato Yeboah called for an intervention from international fronts and the government of Ghana, in order to break the poverty cycle faced by SMEs.
“The recent support from the International Monetary Fund (IMF) and the YouStart programme spearheaded by government are some interesting interventions that SMEs are happy about,” he said.