By Joshua Worlasi AMLANU & Ebenezer Chike Adjei NJOKU
[email protected] / [email protected]
Dr. Ernest Addison, Governor of the Bank of Ghana, expressed optimism about Ghana’s economic trajectory and the continuation of disinflation efforts.
He said this in remarks at a gala dinner celebrating the 130th anniversary and official name change of FBNBank Ghana to FirstBank Ghana.
“Our economy continues to be on a path of progress and it is our expectation that the disinflation process already begun will be sustained,” Dr. Addison stated.
Consumer inflation spiked to 25.8 percent in March 2024, its highest since November 2023, reversing three months of sustained disinflation. The observed increase in the Consumer Price Index (CPI) for the period was attributed in large part to base drift effects, following a sharp decline in prices in March 2023. This prompted calls for calm, with disinflation touted to continue beginning in April.
However, a cocktail of factors, including sustained power cuts, exchange rate difficulties, elevated global domestic oil prices and the latter’s effect on food prices, has raised further concern among market observers.
Despite global oil prices dropping to multi-week lows on account of escalating supply levels, subdued demand and challenging economic indicators, local prices have accelerated. Last Friday, national outfit, Goil, announced an increase in the cost of its Super XP 95 of petrol, with a litre selling at GH¢15.22, from GH¢14.99. This has heightened concerns that transportation operators, who have been agitating for fare increases, would likely react to the new prices.
ESG
During the event, the governor also highlighted opportunities for FirstBank to tap into green and sustainable financing initiatives. The segment is projected to surpass US$40trillion by 2023.
“I would like to encourage FirstBank to leverage on the environmental, social and governance frameworks to attract green funding to support their lending activities,” he advised.
Dr. Addison specifically pointed to the Green Climate Fund, which has allocated IS$1.26billion for climate action in emerging countries.
“To access this and other similar funds, I would encourage FirstBank to seek accreditation status by the GCF,” he urged.
This comes as the BoG has recently issued new regulatory guidelines aimed at strengthening the banking sector’s resilience and aligning with global standards. These include two exposure drafts on the Outsourcing Directive and a Supervisory Framework on Business Model Analysis.
The guidelines, Dr. Addison explained, aim to streamline outsourced products and services of banks as well as manage risks inherent in outsourcing banking activities and ensuring the viability and sustainability of the business models of banks, respectively.
He stressed that these measures are being taken “to ensure a resilient, stable and sound financial system while also complying with the Basel Committee on Banking Supervision’s standards and guiding principles”.
While commending FirstBank’s efforts in financial inclusion, particularly its mobile wallet services, Dr. Addison encouraged the bank to “strengthen its systems and operations that cover the needs of the unbanked population”.
On regulatory compliance, the governor struck a stern tone, stating: “As the regulator, Bank of Ghana is fully committed to remain vigilant in its oversight operations of all financial institutions in Ghana”. He warned that the central bank “will continue to be vigilant to ensure that banks comply with regulatory requirements and guidelines to build trust and confidence in our financial institutions”.
In his concluding remarks, Dr. Addison congratulated FirstBank on its milestones, saying: “Let me, once again, congratulate Management and staff of the First Bank Ghana Limited on this milestone to reinforce the bank’s footprint in the industry. I would like to encourage FirstBank Ghana to deliver on its brand promise and commitment to clients and stakeholders”.
FirstBank Ghana, previously known as FBNBank Ghana, is a subsidiary of the FirstBank Group, a premier West African financial institution originating from Nigeria. The name change aims to align the bank’s identity with its parent company and address brand confusion issues.
