BoG and NDC revisited

According to a GNA report of Monday September 4, 2023, the opposition National Democratic Party (NDC), has rescheduled its protest march to seek the Bank of Ghana’s (BoG) governor, Dr. Addison’s removal from office along with some others. The protest was rescheduled for tomorrow, Tuesday March 12, 2023.

It is quite interesting the way the NDC wants to become relevant in matters of the state, when meanwhile given the chance it will do worse, as proven.

The Bank of Ghana is first and foremost a state institution directly under the Ministry of Finance. It is made up the crème de la crème in the financial sector and has the personnel who can read into events of the day and know what will happen to the economy tomorrow. They also have the knowledge and skills to implement policies to get the country out of economic recession.

The Bank of Ghana will advice government on what to do to avoid financial meltdowns just as the National Security will do on security matters. Both sectors are there to prevent insecurity in the country and make recommendations but it for government to accept or not.Ghanaians should understand that BoG is submissive to government and it cannot do anything it wishes.

The National Democratic Congress has used its authority while in government to bully BoG to the extent of doing harmful things to the administration of finances in this country.

Bank of Ghana is a revenue generating institution and can be said to be the highest earner among all the state institutions. When government borrows internally, it borrows mainly from or through BoG.

During the NDC Mahama regime, from 2013 to 2016, government will borrow from BoG and at the end of the financial year it will direct the Central Bank to use the annual profits it made to offset the government loans owed to the Bank. This was how the NDC related to BoG and the Central Bank always complied.

Recorded facts, from 2013 to 2016, showed that a total amount of GH¢1,750,000,000.00 ($552,464,813.71) was used from the Bank’s annual dividends to offset government’s indebtedness in the books of the Bank in accordance with Section 6 of the Bank of Ghana Act, 2002 (Act 612).

Under the heading of Events after Reporting Date, these will be found in Section 36, page 95; Section 36, page 93; Section 38, page 92 and Section 38, page 90 of Bank of Ghana Annual Reports of years, 2013; 2014; 2015 and 2016 respectively.

Over half a billion dollars of BoG’s money was used by the NDC administration to offset internal debts it owed the Central Bank.These things occurred when Ghana did not encounter any global economic crunch.

During its government, it was all okay for the Bank of Ghana to do that, but not in the NPP government. In the case of NPP, however, money from BoG’s account was not used to offset internal debt government owed the Bank. It was the state calling on BoG to assist in the Domestic Debt Exchange.

This is mainly due to the global economic crisisas a result of Covid-19 and the Russia-Ukraine war. And, BoG is not the only central bank suffering from this. According to Bank International Settlements’ (BIS) 2023 report dated February 7, 2023, central banks the world all over, have increasingly deployed their balance sheets as a tool to pursue macroeconomic and financial stability objectives of their various economies.

And during economic crisis, central banks will increase lending rates and this will directly affect their revenue. This adverse effect on their liquidity does not mean they are facing bankruptcy. So, indeed BoG is not bankrupt.

The NDC are also raging about the cost of the new BoG head office block which is $250 million. If our Terminal 3, built by the NDC, which cost us $275 million at an amount which could construct at least ten new airports in Ethiopia, then the NDC have no cause to complain. The new BoG office is going to accommodate over 2,000 staff and it will be well furnished and equipped with machinery and gadgets to match modern central bank standards.

Will the NDC make noise if this building was started in its regime? Looking at things from the viewpoint that an NDC member was about to sell a plot of land to BoG for the construction, at $32 million.

The NDC is attacking BoG on what it claims was reckless spending on domestic and foreign travels which cost the Bank GH¢97.4 million. Instead of auditing what brought the cost to that amount, the NDC decided to make unnecessary noise. Interestingly, during its regime in 2016, BoG gave golden wristwatches costing $7,000.00 each to seventy-two retiring staff members. If staff official travels are considered reckless, then how can parting gifts costing $504,000.00 to seventy-two workers be justified?

Is it that the NDC in believing so much in itself that it will win the 2024 General Elections, is making all these unnecessary attacks because if it comes to power, the BoG will not have enough money to taken by the party?

Some ministries and state institutions have put up massive and modern offices, e.g., NCA and Ministry of Health and for that Ghanaians have no problem, so why is the NDC pushing Ghana this way? Its protest is self-centred.

Hon. Daniel Dugan

The views expressed in this article are the author’s own and do not necessarily reflect The Chronicle’s stance.


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