Director of Research at the Danquah Institute, Dr Frank Bannor, has indicated that the effect of Covid-19 and the war between Russia and Ukraine, on global economies including Ghana, should not be underestimated.
He says the impact of the two factors on global economies has been documented by the International Monetary Fund (IMF) and the World Bank.
Dr Bannor said these while justifying the recognition by Vice President Dr Mahamudu Bawumia of the role that the Bank of Ghana (BoG) played during the crisis by making advances to the government.
Director of Research at the Danquah Institute, Dr Frank Bannor stated at a press conference in Accra on Tuesday, February 13 that the central bank took a prudent decision to support the government at a crucial period.
At the time, he recounted, Ghana had been severely hit by the COVID-19 pandemic and the Russia-Ukraine war just as other economies including the US, UK Germany, and India also suffered from these exogenous shocks.
At the same period, he said, Ghana had also lost access to the international capital market for support.
“If you are handicapped and you do not have any option but you have a mother with some money elsewhere it will be best to fall on it. We at the Dauqah Institue affirm what Dr Bawumia said regarding the Bank of Ghana’s decision to provide financing to the Government of Ghana during that pivotal period,” Dr Bannor who is also a development economist said.
He further stated that the impact of the Covid 19 and the war “can never be underrated and there are empirical documents from the IMF, and World Bank to to support this.”
Dr. Bawumia strongly defended the BoG during his address at the University of Professional Studies, Accra (UPSA) last Wednesday, February 7 for heavily monetising the fiscal deficit, especially in 2022.
Dr. Bawumia commended the central bank for saving the economy from collapse at a time when Ghana had lost access to international capital markets.
He indicated BoG’s action was responsible and that it was temporary as the Bank had advanced money to Government in only two of the past seven years.
“The Bank of Ghana provided needed financing to the government at a critical moment. What the BoG did was very responsible in putting the interest of the citizens first,” he said.