The central bank of Ghana (BoG) has operated monetary aggregates targeting and inflation targeting since the 1980s, to ensure enhanced output growth, low unemployment and stable, low inflation. Under inflation targeting, the inflation rate averaged 13.26 per cent per annum between 2007 and 2015, compared with 29.22 per cent per annum under monetary aggregates targeting. The relatively lower inflation rates notwithstanding, an average inflation rate of 13.2 per cent per annum is far above the medium-term target of 8 per cent. This paper has examined the effectiveness of monetary aggregates targeting and inflation targeting in keeping inflation at moderate levels. The autoregressive distributed lag (ARDL) model was applied to the data covering the period 1970-2015. The results show that monetary targeting has steered inflation to moderate levels only in the short run while inflation targeting has maintained low inflation rates in both short run and long run. But neither regime has kept inflation at stable levels and within the target band, due to the sluggish transmission of broad money supply and prime rate changes to inflation. We implore the monetary authorities to strengthen the institutional setup for steering short-term interest rates in Ghana. They should also enhance the BoG Act 2002 (Act 612), to develop secondary anchors and rules around output, money supply and fiscal deficit. Finally, the monetary policy committee should monetary policy credibility and transparency through strengthening its communication framework.
Several African countries have abolished secondary school fees in recent years, but there is no systematic evidence on the effectiveness of these initiatives. In this study, we take stock of free secondary education (FSE) initiatives in the region and review their impact on equitable access and the quality of teaching and learning, as well as their cost-effectiveness. We start by discussing the theoretical arguments for and against fee abolition. Second, we look at aggregate statistics on enrollment and transition rates, and find that primary school completion remains far from universal in most countries in the region, meaning that most low-income children are currently ineligible for free secondary education. Third, we provide a comprehensive overview of existing FSE policies in sub-Saharan Africa, showing that almost half of all countries in the region have abolished secondary school fees in the last two decades. Finally, we systemically review the empirical evidence on the impact and effectiveness of recent FSE initiatives. We conclude that free secondary education is an appropriate long-term goal for education systems but can be costly and inequitable in the short run, especially if it diverts resources from primary education. Our review suggests four concrete recommendations for policymakers, which are broadly aligned with the principle of ‘progressive universalism’ in improving access to education.
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