Vice President Dr Mahamudu Bawumia If the Vice-President Dr Mahamudu Bawumia has been a staunch adherent of putting in place digital structures to drive the economic transformation of Ghana, it should be no surprise to anyone who has come across his 2010 bestseller, Monetary Policy and Financial Sector Reform in Africa – Ghana’s Experience.
In the book, Dr Bawumia extensively delved into monetary policy on the African continent and the need for reforms to ensure economic transformation through digitisation.
His recommendations for reforms, after insightfully touching on all hindering issues, focused on digitisation of African economies, which he said will be achieved on three main pillars, namely: unique and verifiable national identification numbers, digital address systems and financial inclusion, which would bring on board the unbanked members of the informal sector.
Unique national identification numbers
Dr Bawumia noted that a key ingredient which underpins financial transaction in any society is trust, but his book found that trust is very low in Ghana’s financial transactions due to lack of database to properly identify people, unlike in developed countries where every individual is identified with a unique national identification number.
Dr Bawumia noted that the only way to curb this is to have a unique national identification number for the people, which can be easily authenticated both “online and offline.”
Address system
Dr Bawumia wrote about the importance of a system of property addresses, but added that it “is probably one of the most underestimated requirements for the development of an economy and its financial sector.”
Stressing on the importance of addressing system in an economy, Dr Bawumia wrote “one can imagine what would happen if for example, the address system in the United States, United Kingdom, South Korea or Japan disappeared overnight. These economies would basically grind to a halt because so much depends on residential or business addresses.”
He therefore recommended that countries like Ghana, should, as a matter of priority, put in place a comprehensive address system, arguing that the absence of address system also “increases the risk premium bankers attach to a loan.”
Financial inclusion Dr Bawumia called it “banking the unbanked” in his book. He observed that “the financial system cannot develop to its potential and monetary policy cannot be effective if the majority of the population continues to be excluded from access to financial services.”Having acknowledged the role the Bank of Ghana‘s e-switch platform was playing in bridging the financial […]
