The 18th annual conference of the African Econometric Society opened in
Accra yesterday, with a call on economic researchers to link research
work with everyday economic realities on the African continent.
The three-day conference, which is being attended by representatives of
member-countries, is on the theme: “The Relevance of Policy Modelling
in an Uncertain World with Specific Application to Africa”.
The Vice President, Mr Kwesi Bekoe Amissah-Arthur, who opened the
conference, said it was unfortunate that the unpopularity of econometric
as a subject had resulted in the lack of proper analysis in the
formulation of policies.
He noted that policy was, therefore, unduly based on theory without
critical analysis based on economic realities on the ground.
Mr Amissah-Arthur said it was heart-warming, therefore, that topics
lined up for discussion during the conference had been based on African
economic realities.
He called on policymakers to be well grounded in econometrics to avoid
the situation where economic forecasting is not based on empirical data.
In a keynote address read for him, the Governor of the Bank of Ghana,
Dr Henry Kofi Wampah, said since its inception in 2002, the inflation
targeting (IT) framework had contributed greatly to monetary policy
conduct, with positive economic outcomes in the country.
He explained that IT had helped to keep the bank’s focus on price
stability and, to a large extent, made the bank to deliver on its price
stability mandate, while economic growth rate had accelerated.
Dr Wampah said over the past decade, Ghana had seen a remarkable
decline its inflation rate explaining that from 40.5 per cent
(year-on-year) in December, 2000, inflation fell to 12.7 per cent in
December, 2007, having touched single digits in April, 2006.
Inflation, according to him, crept to 20.7 per cent in June, 2009,
following external shocks, but after adjusting the policy rate along
with other measures, inflation fell to 9.5 per cent in July, 2010, and
remained in single digits before moving into low double digits in
February, 2013.
He said monetary policy decisions had also created the right conditions
for economic growth, as evidenced by strong growth records, following
the adoption of inflating targeting.
Dr Wampah added that the low inflationary environment together with
other prudent and complementary macroeconomic policies stimulated high
growth rates that averaged 7.1 per cent per year between 2002 and 2012,
compared with a 4.5 per cent average growth between 1986 and 2001.
The BoG Governor said that achieving the price stability objective had
been facilitated by supportive fiscal policy, adding that sustained
achievement of price stability would require a contradictory fiscal
policy and strengthen co-ordination between fiscal and monetary
policies.
Dr Wampah said the bank had since 2002, implemented a number of
structural and regulatory reforms to develop the financial sector.
The money and capital markets, the banking and non-bank financial
institution as well as the settlement and payment systems had seen
structural reforms, he said.
In addition, the financial sector regulatory framework had been
extensively reviewed alongside the enactment of new laws to strengthen
the bank’s supervisory powers.
In his remark, the Vice Chancellor of the University of Ghana,
Professor Ernest Aryeetey, urged policymakers to use policy to shape the
country’s trade and economic development.
He told the delegates that the University of Ghana was in a process of a research-based institution.
Prof Aryeetey said the university would establish centres of excellence
in areas such as malaria, climate change adaptation, food production
and processing and policy monitoring and evaluation.
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