Prof. Godfred Bopkin, Finance and Economics lecturer in the Finance Department of the University of Ghana Business School has attributed the current economic mess of Ghana to the failure of the Bank of Ghana (BoG) to check the financial indiscipline of government.
According to Prof. Bopkin, instead of focusing on their supervisory and independent role as a bank to put in place checks and balances, the central bank’s regulators are found conspiring with the political leadership of the country to destroy the economy.
On his part, he thinks the regulators although aware of the dire consequences of the Domestic Debt Exchange Programme (DDEP) on financial institutions, coerced them into participating in it.
“I have said before; I have a lot of respect for those at the Bank of Ghana, and I’m sure the story will be told one day of how regulators teamed up with politicians over champagne and messed up Ghana’s financial sector.”
Prof. Bopkin
Prof. Bopkin further expressed disappointment in the regulators of the various financial institutions, adding that he is even more concerned about the financial institutions that have signed under the third amendment of the DDEP and is therefore worried about the aftermath consequences they would have to face.
“I feel sorry for the role that regulators have played in coercing these participating financial institutions…the regulators are there to protect the sector they regulate.”
Prof. Bopkin
Proceeding, the finance expert stated that even the academic community is amazed that the government, whose borrowing has landed the country in trouble, is still asking Ghanaians from whom it borrowed money to adjust their lives while they (the government) continue to live in their luxuries.
Meanwhile another blatant allegation against the central bank of Ghana, was made by Cassiel Ato Forson, the newly appointed leader of the minority caucus in parliament, accusing the Governor of the Bank of Ghana, Dr. Ernest Addison for breaching the regulations guiding the work of the central bank.
Ghana’s High Inflation Is As A Result of Failed Financial Governance
Mr. Cassiel Ato Forson is of the view that the hikes in Ghana’s inflation is attributable to failed financial governance.
In a tweet post, Mr. Forson attributed the high inflation in the country and hikes in the Monetary Policy Rate to the actions and inactions of the central bank.
“Inflation is @54.1% and MPR now @28%. We are here largely because BoG has so far printed over ¢50 bn in one year & depleted net intl reserves to record low as of end- Dec.2022.
“BoG’s governor continues to breach Section 30(2) and 30(7) of BoG (Amendment) Act, 2016 (Act 918). Those destroying livelihoods of Ghanaians will soon be held to account!”
Cassiel Forson
This is coming after the Monetary Policy Committee of the central bank increased its monetary policy rate on Monday, January 30th, 2023.
This, the bank said is aimed at to moderating liquidity in the system to underpin macroeconomic adjustments taking place to drive inflation on a downward path.
Prof. Lord Mensah, an economist and Associate Professor, also at the Department of Finance, in the University of Ghana Business School, in this regard, advised that government stops depending solely on Monetary Policy Rate as an inflation targeting tool.
The economist, thinks to reduce inflation, the government should give attention to fiscal discipline – government spending.
“…If we spend in a prudent way, it will have a way of controlling our inflation.”
Prof. Lord Mensah
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