Togbe Afede XIV, the Agbogbomefia Paramount Chief of Asogli State has described the government’s promise of “no haircuts” in the ongoing debt exchange programme as a mockery.
In a 14-page opinion piece, Togbe Afede XIV lamented about the impact of the situation. A reduction in a promised coupon simply means a “haircut,” he stated.
Togbe Afede XIV in his piece questioned on how a blessed country like Ghana with so many resources could be mismanaged to the extent of facing worst economic crises than ever before.
“We are now faced with questions about debt sustainability and our ability to find the fiscal space to fund urgent and critical development needs. Now, the fears about Ghana defaulting on its debt repayment have effectively materialized with the announcement of a domestic Debt Exchange Program.
“And we are making a mockery of ourselves talking ‘no haircuts’ when that is exactly the effect of reduction in promised coupon payments.”
Togbe Afede XIV
According to him, these high interest rates made it difficult for businesses to borrow to undertake their transactions for further investment in the real sectors to achieve value addition. “It has also perpetuated our import dependence, while making it difficult for local entrepreneurs to borrow, invest and increase local ownership of the economy,” he stated.
Not limited to that, he further accused the official of the central bank of Ghana of inadvertently frustrating efforts aimed at restructuring the Ghanaian economy.
“Bank of Ghana officials have inadvertently frustrated the restructuring of the economy, which they themselves have identified as the solution to our balance of payments deficit and currency depreciation problems.”
Togbe Afede XIV
BOG Wrong For Using High Interest Rate To Tame Inflation
Togbe Afede XIV, further revealed that, it was wrong for the Bank of Ghana to adopt the measures of raising interest rates to tame inflationary pressures.
In making a case for his submission, Togbe Afede XIV compared Ghana’s minimum wage to that of the United Kingdom.
According to him, UK’s minimum wage is GBP9.50 an hour or GBP76 for an 8-hour workday, while the wage in Ghana is GH¢14.88 per day, less than GBP1.
“It is also wrong for BoG to persist in trying to tame inflation in Ghana using high-interest rates as could be successfully done in a rich country like the UK. It is difficult to see how policy rate increases can fight cost-pushed inflation resulting from food or crude oil price increases or increased taxes on petroleum products.
“Sadly, even at the height of the COVID-19 pandemic, when income levels had fallen world-wide, and stimulus packages were being implemented everywhere to boost economic activity, BoG still ensured that we suffer under strangulating high interest rates.”
Togbe Afede XIV
While indicating that Bank of Ghana’s’ monetary policy decisions have not been of any significance in improving economic policy measures over the years, Togbe Afede XIV revealed that, it has succeeded in maintaining a growth-stifling ‘high inflation – high interest rate’ environment.
In conclusion he as well added that the policy decisions have also created the most profitable banking sector in Africa, if not the world, all with disastrous consequences for the cedi.
Read Also : Moderate Earth Tremor Hits Parts Of Accra
