Encourage investments that lead to diversification

Page 16, July 21, 2009
Story: Emmanuel Adu-Gyamerah
THE Governor of the Bank of Ghana, Dr Paul Acquah, has charged governments in the sub-region to encourage investments that will lead to the diversification of their economies and provide safeguards to the vulnerable segments of the society.
He noted that it was only such investments that would maintain macro-economic stability in the midst of the global financial crisis.
Dr Acaquah made the suggestion in an address read on his behalf at the opening of a five-day regional forum on the global financial crisis for 35 selected parliamentarians from Ghana, Nigeria, Sierra Leone, The Gambia and Liberia, in Accra yesterday.
The forum, which is being organised by the West African Institute for Financial and Economic Management (WAIFEM), is to acquaint the legislators with the fundamental causes of the global crisis and the effects on the economies in the sub-region.
It would also build and strengthen the capacity of the participants to assess, monitor and evaluate stimulus packages in the annual budgets and deepen their understanding of monetary and fiscal options to insulate African economies from the harsh effects of the crisis.
Dr Acquah, whose address was read on his behalf by the Head of Research of the Bank of Ghana, Mr Lawrence Nketiah, noted that maintaining macro-economic stability was critical to ensure that the domestic economy remained attractive to both domestic and foreign investors.
“The challenge is how to sustain stability and mitigate falling domestic demand within the constraints posed by the increasingly scarce external inflows”, he said, explaining that that “must be done in the context of implementing policies consistent with medium-term stability and development goals”.
He called for enhanced vigilance and interaction with the domestic financial system to ensure adherence to supervisory guidelines to enhance information flow between banks and the central bank.
Dr Acquah stated that while legislators could not contain the global crisis, they could play a role in ensuring that the financial systems contained the right incentives, and were properly regulated.
He added that the legislators could play a critical role in ensuring that the effects of the crisis on economic growth and poverty in the sub-region were limited to the extent that the current crisis did not undermine the improvements that had been made over the years.
In his address, the Chairman of the Finance Committee of Parliament and Member of Parliament (MP) for Ketu North, Mr James Klutse Avedzi, said it was important for legislators within the sub-region to meet from time to time to share ideas and experiences as it pertained in their countries.
He said the selection of Ghana as the venue for the forum was appropriate since it was the only country in the West Africa Monetary Zone that failed to achieve any of the four criteria in 2008 for the introduction of the single currency, the ECO.
For his part, the Director-General of WAIFEM, Professor Akpan Ekpo,stated that the meeting would provide a regional forum for the exchange of ideas and sharing of ideas and experiences on national economic management by the legislators.