Professor John Gatsi, the Dean of Cape Coast University Business School (CCUBS) has disclosed certain tribulations the Central Bank of Ghana (BoG), banks and the economy are likely to face upon the appointment of the Resident Advisor to supervise BoG’s financial activities.
The IMF has assigned a Resident Advisor in financial sector supervision to the Bank of Ghana to provide technical assistance and to assist in building the capacity of the banking supervision function.
The move was at the request of the Bank of Ghana and fully funded by Switzerland’s State Secretariat for Economic Affairs, (SECO).
Commenting on the appointment, Prof. Gatsi averred that banks will suffer in meeting international standards when the International Monetary Fund’s (IMF) Resident Advisor for financial sector supervision to BoG takes office.
The move by the IMF, as stated by the Dean, will make the governor and deputies at the Bank of Ghana powerless.
Mr. Gatsi described the move as “turbulence news” for the country’s financial sector.
“By the appointment, all the powers that are held by the governor, his deputies and key officials are subject to the powers given to the Resident Advisor. To the extent that clearance will be sought in taking major decisions of the bank. That is the implication of the appointment and they are aware of that and they will comply accordingly.
“There is going to be strict adherence to International Financial Standards in terms of reporting the accounts of the bank. There is going to be adherence to strict governance structures and practices. There is not going to be political inducement in the governance structures as we see. So that will be good but in terms of accounting that puts some stress on the bank in terms of adherence to the strict requirements in the International Financial Reporting Standards”
Professor John Gatsi
According to the Professor, the cleanup exercise in the banking sector since 2018 have been “mutilated” to the extent that some of the banks are only standing and not strong.
Mr. Gatsi further averred that some of the banks for about five years have not filed their annual reports.
“So those things will become a challenge when the Resident Advisor begins work and presses on for the requirement of applying International Financial Report Standards.”
Professor John Gatsi
Jinapor Warns Resident Advisor Against BoG Governor
While Prof. Gatsi sees the appointment of the Resident Advisor to have brought a negative impact on the Central Bank’s Operations, the Member of Parliament for Yapei-Kusawgu, Mr. John Jinapor, has rather cautioned the newly appointed Resident Advisor, Mr. Leonard Chumbo to shine his eyes on activities carried out at the Central Bank.
John Jinapor reckoned that there is a mistrust in the Governor of the Bank, Dr. Ernest Addison, which therefore requires proper supervision of the bank’s activities.
Speaking on the floor of parliament on February 16, 2023, the Member of Parliament expressed concern over the Central Bank’s decision to advance funds for government expenditure in 2022.
“I am not surprised that the IMF has appointed Leonard Chumbo as the Financial Sector Advisor for the Bank of Ghana. Let me thank you and welcome you to Ghana but let me plead with you to please open your eyes at the Bank of Ghana.
“I cannot trust that Governor, Dr. Ernest Addison one way or one bit and I beg you Mr. Leonard Chumbo to open your eyes in scrutinizing the documents and ensure that the right thing is done.”
Mr. John Jinapor
The Bank of Ghana has come under intense criticism for its action which resulted in the printing of new cedi notes to the tune of GH¢44.5 billion to support government expenditure in 2022.
The BoG in its response contended that the decision was a crisis management tool since the Fiscal Responsibility Act, 2018 which was suspended by the Parliament of Ghana have not been reinstated.
It further added that the economy would have collapsed and faced a halt as access to the International Capital Market was closed while the domestic market was also struggling.
But analysts believe that the move was entirely wrong and has since caused inflationary pressures in the Ghanaian economy.
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