Our purpose is to improve, not to destroy. The Bank of Ghana (BOG) is at the centre of the country’s financial system. As it grows so does the economy. So, this is a continuation of our focus on the country’s financial system.
Recent reports of BOG’s Financial Statements, showing a loss of GH¢60.8 billion and a negative equity position of GH¢55.1 billion give us cause for concern. During the banking sector cleanup, loans and investments were forcibly impaired by the Supervision Department reportedly with Deputy Governor Elsie Awadzi with the oversight responsibilities. As a result, the licenses of some companies were revoked. Presumably, this was done with the formal approval of the BoG Board of Directors.
During the process of “cleanup”, “Governance” became a magical word thrown about by the BoG, government officials and banking experts and consultants. We assume that the directors of the central bank also took note. Indeed, the BoG has sought to criminalize the perceived actions of some of the directors of financial institutions whose licenses have been revoked. What is the Board’s position on the results of the banking sector cleanup? Did it achieve the intended results? And what about the fact that banks are being required to recapitalize all over again? Shouldn’t the Board of Directors challenge the one size fit all minimum capital requirement regardless of size of bank?
It is also alleged that the Ministry of Finance presented papers to Cabinet to approve sanctions including loss of licenses on the institutions whose licenses were subsequently withdrawn. If that is the case, then what is Minister Ken Ofori-Atta and his ministry’s position on the BoG results?
We are not calling for sanctions as a result of the BoG’s really poor results. We want a commitment to corrective actions to be taken to prevent a repeat of these unprecedented bad results. The People’s Representatives in Particular must weigh in on this. In this regard, we are happy to note the recent “zero financing” for government posture although we don’t like that it is linked with the IMF loan. A senior officer of BoG is reported to have said that, “One of the
outlined steps, as detailed in the governor’s foreword in our annual report, is to minimize lending to the government, effectively categorizing it as ‘zero financing.’ This adjustment is a critical aspect of the overall solution, as it addresses a root concern within the IMF programme”.
To remind our readers, it is on the 4th of March 1957, just two days before the declaration of political independence, that the Bank of Ghana was formally established by the Bank of Ghana Ordinance (No. 34). The principal objects of the new central bank, as enshrined in the 1957 Ordinance, were “to issue and redeem bank notes and coins: to keep and use reserves and to influence the credit situation with a view to maintaining monetary stability in Ghana and the external value of the Ghana pound; and to act as banker and financial adviser to the Government. To what extent then has this BoG acted as financial advisor to Government instead of being a distributor of cash as and when it is called for?
So, who are the persons called upon to serve on the BoG’s Board of Directors? They are:
1.Dr. Ernest Addison Governor (Chairman)
2. Dr. Maxwell Opoku-Afari 1st Deputy Governor
3. Mrs. Elsie Addo Awadzi 2nd Deputy Governor
4. Dr. Samuel Nii-Noi Ashong External Director
5. Mr. Joseph B. Alhassan External Director
6. Dr. Kwame Owusu-Nyantekyi External Director
7. Mr. Andrew Adinorte Boye-Doe External Director
8. Mrs. Comfort F. Ocran External Director
9. Mr. Jude Kofi Bucknor External Director
10. Ms. Angela Kyerematen-Jimoh External Director
11. Dr. Regina Ohene-Darko Adutwum External Director
12. Prof. Eric Osei-Assibey External Director
13. Ms. Sandra Thompson Secretary.
We urge these directors particularly the independent once, to put their shoulders to the wheel and ensure that the BoG makes good in its advisory role and independent constitution. The nation’s precarious financial position does not warrant a rubber stamp board. It would be a shame if men and women of their calibre allow themselves to be dribbled by forces unknown to them. They must hold BoG management accountable and herein lies the jeopardy in the Governor also serving as the Chairman of the Board of Directors.
Finally, we note that the independence of the Bank of Ghana is enshrined in the 1992 Constitution and also defined by the Bank of Ghana Act 2002 Act 612. The Bank of Ghana Act 2002 Act 612 was passed in 2002 but later amended in 2016 as the Bank of Ghana (Amendment) Act 2016 Act 918. The principle of Bank of Ghana’s independence is established in law and Board of Directors must make it happen in practice.