PRINPAG

BoG, PRINPAG Build Capacity Of Journalists On Economic Analyses

The Bank of Ghana is partnering the Private Newspaper Publishers Association of Ghana (PRINPAG) to build the capacity of journalists in effective economic analyses.

Speaking at the opening of the BoG/PRINPAG Training Programme for Financial and Economic Journalist Monday, February 19, Evelyn Kwatia, Head of the Governors’ Department said the Central Bank needs well-informed practitioners to influence the various channels impacted in the monetary policy transmission process.

“As communicating is as much about educating as it is about informing, a training programme aimed at building capacity would surely promote effective communication of monetary policy and financial stability issues at all levels,” she said.

Indeed, she pointed out with a commitment to reduce economic information asymmetry, the Bank regularly provides briefing notes and reports on various aspects of the economy, including the banking sector, to specialist journalists, who will pass on the information to the wider public whose members are always looking for information about the economy.

“However, such specialists can only report based on their capacity and understanding of the Bank’s work and the issues put forth at any given point in time, hence, the need for such face-to-face training programmes that provide our media stakeholders with the opportunity to interact with the experts who work on some of the reports put out by the Bank,” she told the gathering.

She continued that because of the need for the disclosure of financial and economic information to be done in a manner that does not cause disruption to the financial markets, building capacity will enhance the ability of journalists to write informed economic analyses.

“It is the belief of Bank of Ghana that transparency, accountability and credibility would be enhanced through the provision of structured and consistent training programmes for journalists. Indeed, journalists must believe in the central bank’s resolve to fight inflation; as their work is key to positive inflation expectation management, and they can only influence people when they themselves have the firm belief in what they say,” she said.

Below is the full Speech

SPEECH DELIVERED BY MRS EVELYN KWATIA, HEAD OF THE GOVERNORS’ DEPARTMENT, BANK OF GHANA, ON FEBRUARY 19, 2018, AT THE OPENING OF THE BANK OF GHANA/PRINPAG TRAINING PROGRAMME FOR FINANCIAL AND ECONOMIC JOURNALISTS HELD AT THE SUNSET HOTEL, KUMASI (FEBRUARY 19 AND 20, 2018)

1. Let me first use this opportunity to thank the Private Newspaper Publishers Association of Ghana (PRINPAG) for this idea of systematically providing training for its members, and by extension, enriching the work of reporters in financial and economic reporting. Secondly, l would like to thank participants present here for responding to the invitation to be part of this event. This strongly demonstrates your commitment to professional development, which is a sure way to career excellence. It is for this reason that the Bank of Ghana decided to support PRINPAG on this programme; as by understanding what we do, we can effectively work together to achieve our common goal of improving the lives of the citizenry.

2. Mr Chairman, the Bank of Ghana is firmly behind this programme because it is our belief that an independent and well-informed media provide good quality information for the public. Therefore, the Bank needs well-informed practitioners to influence the various channels impacted in the monetary policy transmission process, for example. As communicating is as much about educating as it is about informing, a training programme aimed at building capacity would surely promote effective communication of monetary policy and financial stability issues at all levels.

3. Indeed, with a commitment to reduce economic information asymmetry, the Bank regularly provides briefing notes and reports on various aspects of the economy, including the banking sector, to specialist journalists, who will pass on the information to the wider public whose members are always looking for information about the economy. However, such specialists can only report based on their capacity and understanding of the Bank’s work and the issues put forth at any given point in time, hence, the need for such face-to-face training

programmes that provide our media stakeholders the opportunity to interact with the experts who work on some of the reports put out by the Bank.

4. Furthermore, because of the need for the disclosure of financial and economic information to be done in a manner that does not cause disruption to the financial markets, building capacity will enhance the ability of journalists to write informed economic analyses. It is the belief of Bank of Ghana that transparency, accountability and credibility would be enhanced through the provision of structured and consistent training programmes for journalists. Indeed, journalists must believe in the central bank’s resolve to fight inflation; as their work is key to positive inflation expectation management, and they can only influence people when they themselves have the firm belief in what they say.

5. Mr. Chairman, permit me, at this point, to provide some information on a few of the macroeconomic indicators that impact on the work of the Bank, so that the

importance of this training programme will be better appreciated. Just last week, the Ghana Statistical Service revealed that inflation dropped from 11.8 percent

in December 2017 to 10.3 percent in January 2018. In fact, the Bank of Ghana observed a trend decline in prices during 2017, with inflation dropping from 15.4 percent in December 2016 to the 11.8 percent in  December 2017, as stated earlier. The Bank’s weighted inflation expectations by businesses, consumers and the financial sector also declined in December 2017.

6. Ladies and gentlemen, GDP growth momentum was maintained throughout 2017. Provisional GDP estimates from the Ghana Statistical Service (GSS) indicated that the economy grew by 9.3 percent in the third quarter, up from 9.0 and 6.6 percent in the second and first quarters of 2017 respectively. And, following improved macroeconomic conditions, interest rates also generally followed a declining trend in 2017. Interbank rates, that is, the rates at which commercial banks lend among themselves, declined to 19.3 percent in December 2017, as against 25.4 percent in December 2016. The interest rate equivalent of the benchmark Treasury securities also declined — the 91-day treasury bill rate dropped to 13.3 percent in December 2017 (16.8 percent in December 2016), the 182-day rate also declined to 13.8 percent (18.5 percent in December 2016) and the 1-year note also declined markedly to 15 percent (21.5 percent in December 2016).

7. The Government’s fiscal consolidation process is on track, and is expected to deliver better-than-programmed budget deficit in 2017, as expenditures were

properly aligned to address shortfalls in revenues. Furthermore, economic activity has picked up significantly with private sector credit growth also recovering. These trends are expected to continue in 2018. In fact, the trend decline in headline and core inflation throughout 2017 allowed for some 550 basis points policy rate cut. With inflation expectations well anchored, the medium-term inflation target of 8±2 percent is projected to be achieved this year.

8. Mr. Chairman, it is important that we reduce economic information asymmetry by ensuring, for instance, that most of the important economic figures, like those mentioned earlier, are known by all economic and financial journalists in the country, regardless of where they are residing. Thanks to the advancement in information and communication technology, this should not be a tall order.

9. Ladies and gentlemen, my understanding is that the broad theme of Monetary Policy and Financial Stability Reporting: The role of the media is carefully selected to ensure that participants are exposed to some of the critical areas of the Bank’s work. For instance, participants will have the opportunity to learn about how the Bank’s monetary policy formulation process functions, in effect, the combination of measures designed to regulate the value, supply and cost of money in the Ghanaian economy, in consonance with the expected level of economic activity. This will surely expose you, as participant, to why price stability is important in monetary policy formulation. Without preempting what the experts have put together for you, let me just bring to sharp focus some of the reasons why price stability in particular is important to the Bank of Ghana:

a. High inflation undermines the role of money as a store of value, and frustrates investments and growth;

b. Low and stable inflation supports the economy in the long run and is beneficial to firms and individuals; and

c. Commitment to maintain low and stable inflation is essential for influencing firms’ and households’ inflation expectations, which enhances central bank credibility.

10. That is not all. You will also have the opportunity to learn about issues bordering on financial stability. Financial stability is critical to the promotion of a safe and resilient financial system. It is important to understand that maintaining stable asset prices at all levels is crucial, but that alone cannot prevent a financial crisis

from occurring. Therefore, there is the need for the financial system to be strong and resilient to be able to withstand shocks, stress situations and periods of profound structural change. How this is done will be explained to you over the next two days, together with issues on the regulatory function of the central bank and also issues on financial inclusion initiatives.

11. Distinguished guests, ladies and gentlemen, in our last interaction with some of your colleagues in the Western Region, we had a surprise. And the surprise was that some of the participants were shocked to see Bank of Ghana engaging in the training of journalists extensively today. Well, central bank communication in the past two decades has changed tremendously. Most central banks were shrouded in secrecy in the past, generally spoke less and were seemingly less bothered about the public’s perception of their work. That, perhaps, could have fueled the shock by some of the participants to see Bank of Ghana “talking more” in this generation. You do not find central banks generally operating in “secrecy” anymore! In the words of Mario Draghi, President of the European

Central Bank (ECB), “today, central bank communication is right at the heart of monetary policy. It is actually a monetary policy tool in itself”.

12. Draghi offers some striking difference between what existed then, and the situation now: “Central bank communication was not always so extensive. Think back to the days when the most important central bank in the world – the Federal Reserve (Fed) – would not even publish its interest rate decisions; rather, it would let the outside world derive them from the market reaction. Today, this sounds unbelievable. But it was only in 1994 that the Fed decided to make its interest rate decisions public in real time”.

13. Ladies and gentlemen, Bank of Ghana is committed to transparency and accountability. It is for this reason that we need to work with you- the media-, and to collaborate more, going forward, to ensure that collectively we achieve the desired prosperous nation that we all want. You are, therefore, expected to be an active player in the Government’s transformational agenda, as we build together, a Ghana beyond aid.

14. I wish you a fruitful training programme.