Dr Johnson Asiama, the Governor of the Bank of Ghana, has said the Central Bank bringing down Ghana’s inflation last year came at a high cost.
The BoG Governor detailed that bringing down inflation from 23.8 per cent to 5.4 per cent in 2025 came at a high cost to the Central Bank.
According to Dr Johnson Asiama, the disinflation effort, though successful, required aggressive liquidity management, including open market operations to mop up excess funds from the system.
Dr Asiama highlighted that while tight monetary policy helped reduce inflation from 23.8 per cent in December 2024 to 5.4 per cent by the end of 2025, it came with high financial costs to the Central Bank.
Speaking at the Governor’s Roundtable during the Kwahu Business Forum, the BoG Governor stated, “Last year was good but expensive for the Central Bank. It took us a lot of money to mop up excess liquidity and bring inflation down”.
He further outlined the policy trade-offs involved in balancing inflation control with economic growth.
“The work we do is always about trade-offs… trying to strike the right balance,” he said.
He said exchange rate stability was a key outcome of the policy measures, noting that “the cedi is stable and under control.”
“If you look at where inflation was at the end of December 2024 and where it is now, it would not involve the same level of resources to keep it low and stable going forward,” he added.
Dr Asiama detailed that central banks globally, including the US Federal Reserve and the European Central Bank, face similar challenges, as controlling inflation often carries high financial costs, stressing that, despite the cost implications, controlling inflation remains critical to protecting real incomes and ensuring macroeconomic stability.
“When banks are strong, they can give more credit, and there is a need for collaboration between the Central Bank and the financial sector,” he said.
The BooG governor further assured the business community that the Bank of Ghana would continue to pursue policies aimed at sustaining low inflation while supporting economic expansion.
Meanwhile, Dr Johnson Asiama has cautioned that the Middle East conflict poses fresh inflation risks for Ghana.
The BoG governor disclosed that the escalating tensions in the Middle East could threaten Ghana’s improving inflation.
Dr Asiama highlighted that the Middle East tension is disrupting major global energy and shipping routes.
He further explained that the tension is creating an increasing volatility in global oil markets.
Speaking at the opening of the 129th Monetary Policy Committee (MPC) meeting, the BoG governor stated, “A significant external development has entered the picture, and that has to do with the escalation of the conflict in the Middle East. This conflict is disrupting key energy and shipping corridors”.
“It is increasing volatility in global oil markets, and it is introducing new uncertainty into the trajectory of global inflation,” he said.
He added, “For Ghana, the transmission channels are clear. Sustained oil price increases could raise the risk of imported inflation and could also tighten global financial conditions.”
“Geopolitical uncertainty tends to support gold prices… This could benefit our trade balance,” he added.
In related news, Dr Johnson Asiama, the Bank of Ghana Governor, has admitted that stability is good, but people are hungry.
The BoG Governor detailed that there is unemployment everywhere.
Dr Johnson Asiama further linked the unemployment crisis to the performance of banks.
He revealed that the central bank is focused on stabilising the banking sector to enable lower interest rates for businesses, aimed at boosting growth and job creation.
The BoG Governor also highlight that the high interest rates are killing businesses.
According to Dr Johnson Asiama, the BoG is working to bring down the high interest rates.
He quizzed how businesses borrow money above 30% interest rate, how do you expect that business to repay?
Speaking in a video shared on April 5, 2026, the Governor explained, “Stability is good, but people are hungry. There’s unemployment everywhere. So, the next step is to strengthen the markets.
“Our focus currently is to engineer a low-interest environment and a stable exchange environment”, he said.
“If a business borrows money at above 30%, how do you expect that business to repay? Interest rates are 30%, what are you going to use the money for?” he questioned.
“It’s not surprising there’s a lot of unemployment. It’s not surprising the private sector is still really under pressure”, he said.