Members of parliament from the minority side, led by Dr Cassiel Ato Forson, have described an attempt by the Central Bank of Ghana (BoG) to justify the loss of a whopping GHȻ 60 billion and the negative equity of GHȻ55.1 billion it recorded last year, as insubstantial and shameless.
According to the minority caucus, the BoG’s press statement was full of deliberate distortions and flimsy justifications which did not address the serious matters that they raised in their “Moment of Truth” presser.
It would be recalled that the NDC at a press conference last Tuesday, took on the Governor of the BoG and his deputies for being responsible for the loss of an amount of GHȻ 60 billion last year.
According to the NDC, Governor Addison and his collaborators within government have not just been clueless, but unresponsive, insensitive and reckless in all their dealings, which have worsened the plights of Ghanaians.
Among others, the minority leader vehemently called for the resignation of the Governor of the Central Bank within 21 days, from the 8th of August, 2023 or they would force them out through a massive demonstration.
Bank of Ghana’s response
Meanwhile, the BoG has responded to the claims by the minority caucus, saying “comparing 2022 financial performance with 2021, without taking cognisance of the economic and social crisis in the country is misleading”.
According to the central bank GH¢53.1 billion out of the GH¢60 billion losses reported in the 2022 financial statement was as a result of phases 1 and II of the government’s domestic debt restructuring exercise.
For instance, the BoG explained that vehicle maintenance expenses line as captured in their annual report was a generic name for expense covering fuel cost for all BoG operations, insurance of all BoG fleet of vehicles, car parts replacements and other maintenance cost.
Under the Communication expenses, BoG pointed to electronic data transmission charges, including Reuters and Bloomberg platforms, which supported their reserve management.
Among others, the BoG clarified further that the process which also assisted in the management of petroleum funds as well as currency and exchange rate, constituted about 57.4% of the total communication expenses cost.
This was followed by publications and gazettes 15%, advertisement 10%, local newspapers 0.75% and foreign newspapers which also cost 0.46% of the amount stated for the communication expenses.
Giving details of the Computer expenses as captured in the report which was used by the minority, the BoG explicated that the jump in computer expenses was mainly due to the bank’s asset replacement policy which was implemented in 2022.
Per the policy, most of the desk top computers were replaced with laptops and this, according to the BoG, was in line with the bank’s business continuity policy following lessons learned from the Covid 19 pandemic to allow for flexible working arrangements.
In addition, BoG indicated that all these hardware and software licenses were in US dollars, therefore, the exchange rate depreciation and domestic and global inflations impacted the cedi equivalent on the books of the central bank.
Minority’s rebuttal
In a sharp contrast, the minority caucus intensely disputed the BoG’s explanations saying it did not address the most fundamental issues they had earlier raised, including the printing of money for the government in 2021 and 2022.
The printing of the money, the minority in a statement signed by Dr AtoForson stated, was in clear contravention of Section 30 of the Bank of Ghana (Amendment) Act, 2016 (ACT 918).
“Indeed, throughout the statement, BoG does not and could not have offered any reasonable justification for printing a whopping GHS35 billion in 2021 and GHS42 billion in 2022 to finance the Akufo-Addo/Bawumia/NPP government, in clear breach of their governing law,” he asserted.
Dr AtoForson further stated that the amount of monies printed by BOG for the Akufo-Addo/Bawumia government in both 2021 and 2022 far exceeded the legally acceptable threshold of 5% of the previous fiscal years’ total revenue.
“Indeed, the facts show that BOG acted as law unto itself by wilfully engaging in the illegal printing of monies to finance the recklessness of the Akufo-Addo/Bawumia/NPP government, both in 2021 and 2022,” he said.
In his views, this conduct by the BoG’s Governor constituted a criminal offense under section 67 of the Bank of Ghana Act which could not be washed away by what he called flimsy justifications mounted by the BoG.
Levelling of allegations
Dr AtoForson alleged in his statement that though the governor of the BoG and his deputies claimed that they were committed to promoting a cash-lite economy, they have been printing higher denominations of new GHS100 and GHS200 notes.
This, together with the large injections of money into the economy, he said, caused currency-outside-banks to increase from GH¢14 billion in 2019 to GHȼ31.4 billion by 2022, representing an increase of over 124%.
As a direct consequence of the illegal printing of money by the Bank of Ghana, he added that the rate of inflation in the country spiraled to hyper levels last year when Ghana recorded a record-high inflation rate of 54.1% in December 2022.
According to Dr Forson, a recent World Bank report indicated that the hyperinflation which was mainly occasioned by the recklessness and mismanagement the BoG, pushed over 850,000 people into poverty.
He said, “It is, therefore, totally irresponsible for the managers of the Bank of Ghana to conveniently ignore these serious legal infractions, which have brought untold hardships on Ghanaians and rather engage in flimsy justifications and needless equalisations”.
Conclusion
According to the minority caucus, there was no gainsaying the fact that the Governor, his deputies and directors of BOG have compromised their independence and made their continuous stay in office untenable.
Dr Forson posited that their failed attempt to cite non-best practice as justification for their recklessness and mismanagement was most irresponsible, which justified that they must pack out of the Bank of Ghana immediately.
“In fact, it will take the nation more than 20 years to fix the mess that the current managers of BOG have created and move the bank from its current negative GHS55.1 billion equity to positive equity,” he said.
