The process to introduce Islamic Banking and Finance in the country is on course, Governor of the Bank of Ghana (BoG), Dr Johnson Pandit Asiama, has said.
According to him, the Professor John Gartchie Gatsi, who is the Dean of the University of Cape Coast Business School, is leading a team to help drive the introduction of Islamic Banking in Ghana.
Responding to a question during the 124 Monetary Policy Committee Press Conference last Friday, Dr Asiama said the BoG had internal capacity to handle Islamic Banking.
Islamic banking is defined as a banking system which is in consonance with the spirit and ethos and value system of Islam does avoids interests.
“Professor Gatsi is purposely here to help drive this introduction. Let me say that we have internal capacity, we have some people who know what it takes and what to do. However, we need a few steps. The head of banking supervision has gone through a lot of programmes, he is very comfortable with them,” the Governor stated.
Dr Asiama added “The current banking law, which is Act 930, which we passed in 2016, provides for it. However, there were some lapses. For example, the establishment of the Sharia supervisory boards and the like. Those were not captured in Act 930, so Prof Gatsi and his team will be doing some work in that regard to ensure that we are able to operationalise Islamic financing, especially Islamic banking. Remember, it goes just beyond Islamic Banking, there are other aspects of financing involved. So we are working on it, hopefully very soon, when we are ready, we can consider licenses to establish an Islamic Bank.”
At the MPC meeting on Friday, the Committee in a unanimous decision maintained the policy rate (the rate the central bank lend to commercial banks) at 28.0 per cent, citing stability in the Cedi, high level of inflation and positive external position of the country.
Also the MPC decided to amend the Dynamic Cash Reserve Ratio (CRR) in which the CRR for all banks would now be maintained in their respective currencies, meaning that foreign currency reserves for foreign currency deposits and domestic currency reserves for domestic currency deposits.
The policy measure, the Governor said would become effective on June 5, 2025.
Touching on inflation, the Governor said the country was on course to returning to a single-digit inflation regime by the first quarter of 2026.
According to him, the inflation outlook for the year remained favourable, with the central bank taking firm policy measures to steer inflation toward its medium-term target band of 8 per cent ±2.
Currently, the country’s inflation rate stands at 21.2 per cent, but the BoG is projecting to bring it down to 11.9 per cent by the end of the year.
He said the disinflation process was progressing steadily, driven by the relative stability of the cedi and a tight monetary policy stance.
“We are on course to meeting our inflation target and by the end of the first quarter next year, we believe that we should be able to get back into our target band,” the Governor stated.
The Governor said the threat food posed to inflation had lessened due to targeted interventions and measures announced by the Minister of Finance in the national budget.
“Food inflation was a problem at the last MPC round, but we are encouraged by the measures that the Minister of Finance has indicated in the budget. Assuming those are implemented, we expect that inflation will be contained going forward,” he said.
Dr Asiama expressed optimism that, barring any unforeseen external or domestic shocks, the BoG would be able to meet its inflation target within the set timeframe.
BY KINGSLEY ASARE
