Managing Editor of the Insight Newspaper, Kwesi Pratt Jnr, has lamented the performance of the Bank of Ghana (BoG) and its activities in the country.
According to him, considering the rate of the cedi and the general state of the Ghanaian economy, there’s no way one can argue that the Bank of Ghana is doing well. He revealed that the management of the banking crisis has not equally resolved the fundamental problems that confront banking in Ghana.
Mr Pratt expressed frustration that in spite of what the Bank of Ghana is going through now, it is setting aside $250 million in acquiring a new office. This, he noted, is quite “alarming”, questioning the “excuse” by the Bank of Ghana on the premise that the building doesn’t have structural integrity.
“… As we speak, there’s a certain expectation that we could experience some kind of a banking sector collapse which will involve at least up to about five banks. So, there’s a huge problem with the bank of Ghana… So, I’m completely dissatisfied with the performance of the Bank of Ghana, it hasn’t done well, and we need to take measures to restore sanity to the Bank of Ghana.”Kwesi Pratt Jnr
Furthermore, Mr Pratt explained that the state of the economy is really “worrying”, and the Bank of Ghana has not been able to ensure the implementation of basic things, as it is more focused on “printing money without reference to parliament and printing money and pumping it into the economy apparently at the behest” of government. This, he highlighted, is a reckless move to undertake.
“I also saw the Bank of Ghana’s expenditure on vehicle maintenance and repairs, and I was quite alarmed. I was told somebody who did the calculation says that it can buy 115 Landcruiser and that kind of money was used for maintenance…”Kwesi Pratt Jnr
Violation by BoG in breaking 5% threshold
On his part, Acting CEO of Volta Aluminium Company (VALCO), Titus Glover, stated that when it comes to the issue of the Central Bank supporting government activities, because Ghana does not have access to international capital market and the only way government can raise money to support government is through domestic yields, it is justified.
He noted that this is the more reason why the Central Bank has come to the rescue of government to make sure it’ll be able to support it in carrying out some of these things.
“One might think that the Central Bank has over-borrowed but the situation in which we find ourselves, there’s no other way that we can support government than to go to the Central Bank to come to the rescue of government… The IMF whom we have gone to in the running of this economy really felt nothing bad about that – thinking that the only way that we can support government is for the Central Bank to come to the rescue of government. But there should be a way that government should pay up these loans that it has contracted from the Central Bank.”Titus Glover
On the issue of the Bank of Ghana and finance ministry violating the Public Financing Management Act (PFMA) via going beyond the 5% threshold of lending to government, Mr Glover concerted that the BoG should have gone to parliament to ensure that all these provisions are adhered to, “so that everybody’s back is covered”.
However, he emphasized that when one party takes a “unilateral decision”, then there’re always problems.
“They should go back to parliament and make sure they do the needful so that we will not go back and repeat the same things that we find ourselves in. The Central Bank seriously needs to support government. We cannot go to the international capital market anymore, so the only panacea we have is to fall on Central Bank to advance some money to support government business.”Titus Glover