Parliament must strengthen oversight to save BoG — Dr Sam Ankrah
A Development economist, Dr Samuel Ankrah, has urged Parliament to play a oversight role in preventing governments from creating financial challenges for the Bank of Ghana (BoG) in the future.
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He blamed the government for the heavy loss posted by the central bank for the 2022 financial year, and said if Parliament had played its oversight role more effectively, it could have prevented the bank from engaging in unrealistic financial transactions with the government.
“The loss” of approximately GH¢60.81 billion by the bank in the 2022 financial year was as a result of clear mismanagement of the economy by the government which overly exposed many institutions, including the central bank.
“This deficit stands in sharp contrast to the previous year's profit of GH¢1.23 billion,” he said, and wondered how such a matter escaped the scrutiny of Parliament.
Dr Ankrah, who was speaking to the Daily Graphic in an interview in Accra, added that since the announcement of the loss, many economic watchers had raised concern and blamed the government for the central bank’s financial situation, including criticisms of the government's fiscal policies and economic management, as well as “failure to uphold even the most basic constitutional mandate”.
For instance, he said giving the government 30 per cent of its annual budget as an “overdraft” was wrong.
Dr Ankrah, therefore, said the “Governor must constantly come to Parliament and give an account of the state of the central bank.
If the bank fails to follow the various acts, there should be sanctions”.
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Challenges
Dr Ankrah further said: “While the impact of the COVID-19 pandemic cannot be ignored as a contributing factor to the country’s economic woes, the government was ill-prepared to respond effectively to the crisis.”
He referred to Article 183 of the 1992 Constitution which reinforced the Bank of Ghana as the only authority to print the country’s currency, as well as perform other specific mandate.
The economist said since the mandate of the central bank was backed by law, Parliament should be able to use its powers to stop the bank from overstepping its boundaries.
He said the government had also failed to promote and maintain the stability of the local currency, a phenomenon that contributed in part to the bank’s loss, and also making it difficult for businesses and individuals to plan for the future.
Interference
Dr Ankrah said the government could not provide the Bank of Ghana with the necessary independence it required to carry out its mandate.
“The government interfered in the bank's monetary policy decisions and also failed to implement policies that promote financial stability which have serious impact on the people,” he said, adding that the loss of value of the cedi had made it difficult for people to afford basic necessities because they could not make ends meet.
“The government must take urgent steps to address these problems, and also ensure that the constitutional mandate of the Bank of Ghana is upheld,” he said.
Dr Ankrah said the current situation must be a wake-up call for Parliament to play its oversight roles more effectively without fear or favour to protect the central bank for the good of the economy.