Economist and Professor of Finance at the University of Ghana Professor Godfred Bokpin has added his voice to the growing calls from academia and industry against the stay of office of the Bank of Ghana Governor, Dr Ernest Addison.
According to him the BoG Governor’s stay in office is untenable and must recuse himself because of his weakness and ensuring the loss of $5 billion dollars in a single year.
“The BoG failed to act as an appropriate check in accordance with the fiscal act and the result is result is the loss they have on their books, the governor should have resigned,” he stated when he took his turn on the Graphic Business Twitter Dialogue Series yesterday.
The country is currently going through its worst economic crisis in a generation. Last year, the inflation rate hit a record high of over 54 percent – and is still running at more than 40 percent. Multiple credit rating agencies have downgraded the nation, preventing it from borrowing money internationally.
By September 2022, Ghana’s total debt had surged to $55bn. This meant the government needed in excess of 70% of its income to service the debt, something it was unable to do. It subsequently defaulted on much of its debt payments.
The government was forced to approach the International Monetary Fund (IMF) for assistance. To secure a $3bn bailout earlier this year, the government had to agree to fulfil a number of requirements.
“We have never seen anything like this in our history. If the Bank of Ghana wants to recover from this loss… it will take them more than 45 years,” Professor Bokpin had earlier told the BBC.
“The Bank of Ghana Act is very clear that printing money or financing the government is limited to 5% of the previous year’s fiscal revenue, which means that in principle supporting the government is not a crime but don’t go beyond 5%,” he continued.
Country needs men of courage and gravitas
Professor Bokpin says the country needs men who have the courage and can call the bluff of politicians and lead the country to the right path.
According to him the country does not need people who will acquiesce to the whims and caprices of politicians but rather those who will value who they are and speak truth to power.
“We need to speak truth to ourselves, we need to speak truth to power, parents are now paying more than they paid for when there was no free shs,’ he stated.
Human Impact
A World Bank report last month estimated that 850,000 Ghanaians have drifted into poverty because of high inflation.
Ghanaians’ incomes have been eroded, affecting their purchasing power. The prices of food, fuels and utilities remain high, and many households are struggling to make ends meet.
And on top of all that, the central bank is now under scrutiny from both within the country and the IMF.
Under the terms of the IMF loan, if the government demands more bailouts, the bank will have no choice but to refuse.
Source: classfmonline.com
