Musa Danquah, a renowned financial consultant and Executive Director of Global InfoAnalytics, has pointed a finger at the Bank of Ghana (BoG) for the country’s current economic difficulties.
The former Financial Specialist at the World Bank, in a sharp critique of Ghana’s economic management, contended that the BoG’s failures in managing key economic functions have significantly contributed to the financial strain on Ghanaian citizens and the government’s challenges.
“Stable Exchange rate and price stability are the two key functions of the Bank. The BoG has not been effective and successful in managing the exchange rate, resulting in increases in cost of items linked to the exchange rate, thus impacting the cost of living very badly.
“The bank has also failed in its function of maintaining price stability through inflation targeting and fighting when compared to many of its peers in the region”.
Musa Danquah, Renowned Financial Consultant and Executive Director Global InfoAnalytics
According to Mr Danquah, in the Bank of Ghana’s bid to support the government’s budget, the central bank engaged in quantitative easing, a policy widely recognized during the 2009 global financial crisis.
This involved printing currency beyond a reasonable amount, which, according to Mr Danquah, has been a significant factor in the current economic crisis, Ghana is facing.
He argued that this move rendered the Bank of Ghana’s tools for combating inflation ineffective, contributing to persistently high inflation rates.
Impact on Political Landscape
Furthermore, the former Director of Commercial Finance at Margins Group, Musa Danquah underscored the political implications of the Bank of Ghana’s actions.
He asserted that the actions of unelected officials at the bank are affecting the prospects of elected leaders, particularly the Vice President Dr Mahmudu Bawumia, in the upcoming elections.
He underscored the importance of an independent central bank, drawing comparisons to the actions of the Bank of England’s Governor during the economic turmoil caused by the then Chancellor Kwasi Kwarteng’s mini-budget.
Mr Danquah pointed out that the decisive actions taken by the Governor of Bank of England helped mitigate the crisis and stabilize the England’s economy.
“There are good reasons why the BoG must be independent. We saw the actions the Governor of Bank of England took when the then Chancellor Kwasi Kwarteng, Hon. messed up with their economy in the mini budget he presented to the Commons and how the markets reacted and what the Governor did. Today, Kwasi Kwarteng has earned himself the accolade, the destroyer of people’s mortgages”.
Musa Danquah, Renowned Financial Consultant and Executive Director Global InfoAnalytics
Critique of Leadership and Call for Accountability
Mr Danquah criticized the Governor of Bank of Ghana, Dr Ernest Addison for failing to control the former Finance Minister, Ken Ofori-Atta, and attributed the current economic situation to the Governor’s poor discharge of his oversight mandate.
“Those MPs who were calling for Ofori Atta’s head knew something all of us knew but pretended we did not see”, Mr Danquah stated, asserting that the calls for Mr Ofori Atta’s resignation reflects a broader understanding of the economic mismanagement.
Mr Danquah expressed hope that the appointment of the new Finance Minister, Honorable Mohammed Amin Adam, will bring stability and effective management to the Bank of Ghana.
He called for a more informed and constructive discussion on the issue, urging commentators to contribute thoughtfully to the academic discourse that could go long way to benefit the country.
Mr Danquah’s comprehensive critique sheds light on the significant role the Bank of Ghana has played in shaping the country’s economic landscape.
His analysis underscores the importance of effective and independent central bank management in maintaining economic stability and highlights the far-reaching implications of financial mismanagement on both the economy and the political environment.
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