UG Don decries lack of transparency in BoG dealings

An Associate Professor of Finance at the University of Ghana Business School (UGBS) has decried the lack of transparency in the dealings of the Bank of Ghana (BoG).

Prof Lord Mensah said he has personally been calling for the head of the central bank Governor, Ernest Addison as his outfit seems to be abusing its operational autonomy.

Speaking in reference to the BoG’s recently published balance sheet, which has revealed a loss of GH¢60.8bn in 2022, the Finance expert said he suspects the Bank has been involved in some irregularities.

“They [BoG) seem to be too opaque in their dealings. From where I sit, publishing your balance sheet and then looking at these numbers coming up, it tells you so many things.

“There are so many attributes to those increments…they’re abusing the operational autonomy that they have,” he said .

Speaking on its governance autonomy, Prof Mensah expert said the central bank does not act independently because the president has his representatives there as board members.

“Operational autonomy which was the last straw that we were relying on has been abused,” he added.

Explaining how such huge losses might have come about, the finance expert said there are laid down procedures on how the central bank could intervene during economic challenges, but he said it seems the outfit defaulted in that regard.

“Clearly, if the Bank of Ghana would print money and finance a budget deficit, it’s a way of meddling with the fiscal aspect of the economy.

“I’m not saying that central banks are not supposed to come to the rescue when economies are not doing well. But if a central bank wants to rescue an economy, they don’t channel the money through the government circles.

“There is a logical reason why the central bank can only finance the government expected revenue in a particular fiscal year up to only five per cent.

“The reason being that the central bank per the Act, is supposed to wire money to the economy through the monetary channels, not the fiscal channel; the monetary channel through the banks,” he explained.

The BoG’s loss which amounts to GH¢60.8bn is said to have come about per the following components;
Non Marketable Instruments – GH¢32.3bn
Marketable Instruments – GH¢16.1bn
COCOBOD – GH¢4.7bn
Price and Exchange rate valuation – GH¢5.2bn
Interest expense on the cost of monetary policy – GH¢3.3bn.
Amongst these losses, it has also been reported to have spent $250 million on its new Head office.

Meanwhile, the Minority Caucus in Parliament has expressed outrage at the figures.

It has, therefore, called for the immediate resignation of the Governor, Ernest Addison for causing such a loss.

But Economist, Dr Patrick Assuming says the BoG should be given the opportunity to explain the details regarding the losses.

He would not call for the resignation of the governor.

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