The Minority in Parliament has requested the Governor of Bank of Ghana to assert his independence and credibility or immediately resign.

According to the minority, most of Bank of Ghana’s actions in recent times are “surprisingly schemed to accommodate financing” of government. It indicated that this has been achieved without regard to the “negative impacts of such dominance” to the country.

Contained in a statement issued by the Minority leader, Haruna Iddrisu, it revealed that the move by the BoG is undermining the credibility of its policy decisions and needs to be curtailed.

“The Governor of BoG must assert his independence and credibility or immediately resign as his counterpart in Egypt has done. Governor Tarek Amer resigned only yesterday following criticisms over his handling of the country’s financial challenges which have seen the Egyptian local currency depreciate significantly against the US dollar in recent times.”
Minority

The NDC Caucus in Parliament further reminded BoG that it has “all the independence and powers” to engineer a move away from the current fiscal dominance that the country is currently experiencing.

Monetary policy will negatively affect businesses

Meanwhile, the Chief Executive Officer of the Association of Ghana Industries (AGI), Seth Twum Akwaboah, has indicated that the outcome of the Bank of Ghana’s measures to control Ghana’s rising inflation has not been particularly positive for businesses in the country.

According to him, although these policy measures may have worked in previous years, they are currently failing to produce the same desired effect.

“It looks like our fundamentals are so weak that even though Bank of Ghana is introducing these measures, we’re not seeing the positive effects that we expect.”
Seth Twum Akwaboah

Mr Akwaboah highlighted that considering the past three policy rate review of the monetary policy committee meetings, “they’re always reviewing and revising the policy rate upwards”. As a consequent, he explained that one would have expected that by now, inflation would have come down drastically.

“So, it means that there is something more to it than merely increasing the policy rate.”
Seth Twum Akwaboah

The AGI CEO emphasized that the failure of the BoG’s measures to stabilize the economy is indicative of the fact that more needs to be done to solve the current crisis. He stated that some of the measures that the Bank of Ghana is planning to introduce, which include discussions with the mining sector to ensure that the export proceeds are repatriated home and then being able to buy the dollars that they get, may be the measures that businesses need to see.

“For now, it’s very difficult to predict the situation. No one can tell which particular measure will be the game changer; a combination of things must happen. So, we need to monitor the situation and see but I think what we’re finding ourselves in now is quite a challenging one.”
Seth Twum Akwaboah

It will be recalled that there was an emergency Monetary Policy Committee (MPC) meeting held on August 17, 2022, which increased the policy rate by 300 basis points.

Among other reasons, the Committee stated that it increased the policy rate from 19 percent to 22 percent due to “heightening of uncertainties in the global economy, rising inflation in many advanced economies and the resultant coordinated” tightening of monetary policy stance by major central banks.