Dr Ernest Addison, Governor of the Bank of Ghana (BoG), has said that central banks across the globe must enact policies to protect recent human capital gains, hard won amidthe coronavirus pandemic.
Speaking in a virtual 2020 IMF/World Bank Annual Meetings, Dr Addison said: “We need to enact policies that protect recent hard-won human capital gains and prevent long-term damage to the poorer and vulnerable segments of our societies.”
He said: “We also need continued support from the international community to avoid this health crisis becoming a humanitarian crisis. As we move out of firefighting mode, we should think about the type of post-COVID world we want to shape. We need a recovery that is people-centred, sustainable and fair.”
Dr Addison said the COVID-19 pandemic has taught the world that a virus knows no borders, and he added, “We are all in this together, and the global financial safety net is only as strong as its weakest link.”
But we also know that multilateral co-operation can provide a response of unparalleled reach.
Dr Addison said: “The Fund and the Bank membership has shown that we can come together and act when needed. It is important that we keep this momentum as we discuss our shared challenges and joint solutions for global health, economic prosperity and equality over the coming days.
“I commend the IMF and the World Bank Group for once again showing their strong commitment to global economic co-operation. I am proud to see the global community has risen to meet this daunting global challenge with global solutions.
“But this is not yet the moment to look back. The crisis is not over and the pandemic continues to take a significant toll as more people have slipped into poverty and inequality has worsened, particularly among women and children, who have been the hardest hit.”
Lost decade for the world’s poor
Dr Addison also told fellow guests at the meeting: “The role of the Bretton Woods institutions in galvanising global attention and support, particularly for the most vulnerable, is most commendable, but there is room to better address the needs of all members.”
He argued that the time for the world to act is now, because “we are facing the prospects of years of poverty reduction and economic progress being reversed by the pandemic. The shockwaves from the COVID-19 crisis could lead to a lost decade for the world’s poorest countries unless they receive urgent help and financial assistance.”
The International Monetary Fund (IMF) has asked global economies to restructure what they owe to make debt sustainable. The exhortation follows the Fund’s prediction of high global debt levels in 2021 following the outbreak of the coronavirus disease.
The IMF is predicting a 125% increase in the debt stock of developed countries. Debt stock for emerging economies, including Ghana, is expected to increase by 65%, whereas that of low-income countries is expected to increase by 50%.
Speaking at the same event, Kristalina Georgieva, the managing director of the IMF, argued that the best way to ensure countries’ economic survival is for them to restructure.