Financial imprudent decision by the BoG and finance minister cost Ghana the avoidable GHC18bn – Economist

 

Adnan Adams Mohammed

An economist has chided the of Governor of Bank of Ghana, Dr. Ernest Addison and Ken Ofori-Attah, the Finance Minister over running the country into further debt because of their ‘financial imprudent decision’ in the handling of the banking sector clean-up since 2017 to 2019.

In the face of other options; that will not cost the tax payer a pesewa (GHC0.01) in cleaning the banking sector mess, they opted to go borrowing a whopping eighteen billion new Ghana cedis (GHc18 billion) which will attract an interest at the spot rate, if hedged it is still punitive and avoidable, Dr H. Kwame Afaglo, an economist and lecturer at Hams Technology Institute has said.

Political leadership interference in the monetary role of the Bank of Ghana does seize the highly desired functional independence of the central bank, and this has left Ghana with a debt of GHC18 billion. As the alternative cost of their imprudent financial decision in this banking clean-up could have provided each of the sixteen regions of Ghana, five (5) modern hospitals at a cost of GHC50 million which is no different from that of the recently (18 August 2019) re-commissioned Upper West Regional Hospital.

“This financial imprudent decision by the Governor Dr. Addison of Bank of Ghana and the Ken Ofori-Atta-Attah the Finance Minister cannot be swept under the carpet of a poor country as Ghana”, Dr Afaglo said in his latest article.

He explained that, as a starter, World Bank has always being insisting on the independence of the central bank from political interference as functional independence and personal independence of the central bank being Bank of Ghana and the person of the Governor who is in charge.

Hence the first deliberate infraction that Nana president and Ken Ofori-Atta-Attah committed was the forcing out of then Governor and his Deputies of the Bank of Ghana, and appointing their political kind being Dr. Addison. This deliberate infraction is compromised the personal independence of the position of the Governor of Bank of Ghana.

The cost of this infraction is the subject under discussion.

As a recommendation, the governor of Bank of Ghana must be appointed by the legislature (parliament) and s/he must have a term longer than the presidential tenure being five (5) years

The other infraction by the two accused persons is got to do with their choice in decision making when it was most necessary in the banking clean-up.

Full statement below:

Banking Clean-Up and the Financial Imprudent Decision by the Governor of Bank of Ghana and the Finance Minister that Cost Ghana the Avoidable GHC18bn

Governor Dr. Addison of the Bank of Ghana and Ken Ofiri-Attah the Finance Minister of Ghana have run the country into further debt because of their _financial imprudent decision_ in the handling of the banking clean-up in Ghana since 2017 to 2019.

As a starter, World Bank has always being insisting on the independence of the central bank from political interference as functional independence and personal independence of the central bank being Bank of Ghana and the person of the Governor who is in charge.

Hence the first deliberate infraction that Nana president and Ken Ofori-Atta-Attah committed was the forcing out of then Governor and his Deputies of the Bank of Ghana, and appointing their political kind being Dr. Addison. This deliberate infraction is compromised the personal independence of the position of the Governor of Bank of Ghana.

The cost of this infraction is the subject under discussion.

As a recommendation, the governor of Bank of Ghana must be appointed by the legislature (parliament) and s/he must have a term longer than the presidential tenure being five (5) years

The other infraction by the two accused persons is got to do with their choice in decision making when it was most necessary in the banking clean-up.

In the face of other options that will not cost the tax payer a pesewa (GHC0.01) in cleaning  the banking mess of Ghana, they opted to go borrowing a whopping eighteen billion new Ghana cedis (GHc18 billion) which will attract an interest at the spot rate, if hedged it is still punitive and avoidable.

This financial imprudent decision by the Governor Dr. Addison of Bank of Ghana and the Ken Ofori-Atta-Attah the Finance Minister cannot be swept under the carpet of a poor country as Ogyakrom.

As the alternative cost of their imprudent financial decision in this banking clean-up could have provided each of the sixteen regions of Ogyakrom 5 modern hospitals at a cost of GHc50 million which is no different from that of the recently (18 August 2019)  re-commissioned Upper West Regional Hospital.

Political leadership interference in the monetary role of the Bank of Ghana does seized the highly desired functional independence of the central bank, and here we are with a debt of GHc18 billion new cedis.

Just wondering if this financial imprudent decision is what the Nana president administration promised the people of Ogyakrom as value for money.

-a) Will there be a public enquiry into this banking clean-up exercise as post project evaluation?

As both the financial and non-financial ramifications has come at a cost more than the problem itself?

-b) How can the Bank of Ghana and FinMin go borrowing a whopping GHc18 billion to clean up the banking mess which cost far less (speculatively half) than the amount borrowed?

_This is not commonsensical_

Thus, *Governor Addison and FinMin KenBond have to resign and save the country from further deepening of public debts that can be avoided, as well as abusing and depriving the poor people’s tax of quality public  amenities respectively*

Without being bookish, democracy has accountability as an integral part and the concept of accountability must be evoked to make Dr. Addison and Ken Ofori-Attah come face public enquiry as resigned public office holders.

-c) The banking clean-up comes across as not a well thought through programme under Dr. Addison and Ken Ofori-Atta as, we still have some banks that are yet to meet the required minimum reserve while  some others were shut down, yet they claim the exercise is over.

_This is an unethical approach and can not or must not be allowed to continue as it will serve as basis for future bias or retaliatory actions against some financial institutions_

-d) How can within 2017 - 2019 the Bank of Ghana shuts down over 400 financial institution and not have a remedial plan to cater for suicidal cases of some employees and customers?

No amount of money can be of higher price than that of human life, but under this banking clean-up the duo Dr. Addison and Ken Ofori-Atta, so is the account without any remorse.

#Resign Dr.Addison for the lost of lives in your execution of the banking clean-up

#Resign Ken Ofori-Atta as your decision in the banking clean-up had no human face

May the souls of employees and customers of the over 400 financial institutions who passed on due to the messy banking clean-up project rest in peace

_Nye gbe dze anyi_

©2019 rafa raja