Minority Leader Calls for Bank of Ghana Governor’s Resignation Amid OccupyBOG Protest

Minority Leader Dr. Cassiel Ato Forson has urged the Governor of the Bank of Ghana, Dr. Ernest Addison, to step down amid what he believes is a financial crisis at the central bank. Dr. Forson expressed this view in a petition to be presented to the Governor as part of the OccupyBOG protest scheduled for Tuesday, October 3, 2023.

In the petition, Dr. Forson states that the NDC Minority in Parliament does not believe that Governor Addison and his two deputies, who they hold responsible for the central bank’s difficulties, are capable of addressing the situation. They call for new leadership that is politically neutral and capable of fulfilling the central bank’s mandate, rebuilding trust and confidence in financial markets, and restoring faith among investors and the public.

Dr. Forson alleges that the Bank of Ghana has overseen excessive printing of currency to finance budget shortfalls and likens this practice to “alcoholism,” where immediate gratification is followed by a hangover.

The OccupyBOG protest is organized by the opposition NDC, along with other political parties and civil society organizations, including the PNC, APC, and COPEC. Their primary demand is for the central bank’s management, including Dr. Addison and his two deputies, Dr. Maxwell Opoku Afari and Mrs. Elsie Addo Awadzie, to resign, accusing them of mismanaging the Bank of Ghana.

Dr. Forson’s petition asserts that the central bank’s managers have consistently failed to assert their statutory independence and have neglected their responsibility to protect the Bank of Ghana’s balance sheet in the face of an allegedly “overbearing and incompetent” Finance Minister and Chairman of the government’s Economic Management Team, Vice President Dr. Alhaji Mahamudu Bawumia.

The petition highlights a series of factual developments that, in Dr. Forson’s view, make the continued tenure of these officials unacceptable.

The outcome of the OccupyBOG protest and the Minority’s push for the Governor’s resignation will be closely monitored by political observers and the public, as it reflects ongoing tensions between protesters’ demands for accountability and the central bank’s management.

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“The financial sector has virtually collapsed, with all the 23 banks in the country recording massive impairment losses of over GHS18 billion in 2022. The apparent sign of renewed profitability in the banking system is only on account of foreign-owned banks who benefitted from increased deposits away from the local banks and invested these in Bank of Ghana bills.

The illegal and excessive printing of money of GHS80 billion (evidenced by paragraph 2 of the Memorandum of Economic and Financial Policy) caused the depletion of Ghana’s external reserves of $6.3 billion which resulted in the unprecedented depreciation of the Cedi as it fell from GHS6/$1 to over GHS15/$1 while inflation rose to hyper levels of 54.1% in 2022. This unprecedented development in the history of the 4th Republic, coupled with inflation, have reduced the rich to a middle class while the poor have become poorer. Paragraph 8 of the IMF Staff Report gives further detail that the Bank of Ghana illegally and excessively printed over GHS45 billion, representing 7.2% of GDP in 2022 alone, and GHS35 billion in 2021. Again, this is unprecedented in the history of Ghana.

The overarching policy for price stability in the context of Ghana is the implementation of prudent monetary policies that ensure general price stability and inflation within a target band of 8%, plus or minus 2%. What is the reality today? Inflation is currently 40.1% and rising, in spite of the fact that it is projected to be 31.3% by the end of the year. Monetary policy rate is 30% and rising and commercial bank lending rate is 36% and rising. 91-day T-bill rate is also now 28.7% and rising.

 In contrast, you will recall that in 2016, on the watch of President John Mahama, and notwithstanding that it was an election year, the NDC government financed the entire budget without any support from the Bank of Ghana. At the moment, the Bank of Ghana is a crime scene and the managers of the economy led by Vice President Alhaji Mahamudu Bawumia continue to aid and abet this economic crime.

 In 2022 alone, under the governorship of Dr Addison and his deputies, the Bank of Ghana recorded a colossal loss of over GHS60.8 billion and negative equity of over GHS55.1 billion. This loss is about twice the money that Ghana is seeking in the current IMF programme. This explains why Paragraph 18 of the Memorandum of Economic and Financial Policy (MEFP) stated that: “The Government and the BoG will assess the impact of the debt restructuring on the BoG’s balance sheet and develop plans for its recapitalisation”.

 Clearly, the Bank of Ghana is in a major financial distress and bankrupt; this requires urgent attention. In its present form, the Bank of Ghana exists merely in name under Governor Addison and his deputies. Ghana’s central bank has been so mismanaged that it has recorded an unprecedented loss and it is incomprehensible that the Governor has continued to justify the colossal loss recorded by him, claiming that the Bank of Ghana was not set up to make profit. This is not only a lame excuse but also an insult to the people of Ghana, to say the least. In any case, was the Bank of Ghana set up to make losses?

Again, in justifying his outrageously expensive and the so called earthquake-resistant new Bank of Ghana head office of over $250 million, the Governor said he commenced the construction with profit from 2019 to 2021. Now that the Bank has made an unprecedented loss of GHS60.8 billion ($6bn) with a negative equity of GHS55.1 billion, how is the Bank of Ghana going to continue the construction of its so-called earthquake-resistant new head office with these losses? Are they going to fund the remaining 59% of your new head office building from the losses or they will print money again, Mr. Governor?

The 2022 Annual Report and Financial Statement of the Bank of Ghana details the extent of rot and gross mismanagement of the affairs of the bank on the watch of Governor Addison and his two Deputies. Administrative expenses assumed such obscene proportions as managers of the bank spent a whopping GHS67.9 million on computer expenses, while communication expenses amounted to GHS32 million.  Another GHS131.6 million was spent on motor vehicle maintenance and running in 2022 alone, representing 114% increase over previous year’s expenditure.

Foreign and domestic travels of the bank cost a staggering GHS97.4 million, which is about 246% increase over the previous year. Directors remuneration cost the Ghanaian taxpayer GHS8.6 million, representing 87% increase over the previous year’s, which simply meant that Ghanaians were charged a “mismanagement fee” to deliver the collapse of the bank.

Banking Supervision is said to have cost a colossal amount of GHS357.9 million, while other ‘undisclosed’ expenses amounted to GHS287.8 million. It is clearly unacceptable for the Bank of Ghana to be mismanaged in this manner.

Today, the Bank of Ghana is in such mess because of the actions and inactions of Governor Addison and his two deputies to illegally and excessively print money to finance government’s over-bloated expenditures and reckless borrowing from the Minister of Finance. Of course, all of these were under the direct supervision of Alhaji Dr Bawumia, the Chairman of the Economic Management Team.

 Another unpardonable sin committed by the Governor and his two Deputy Governors is their decision to write off government debt of GHS48.4 billion on the blind side of the Parliament of Ghana. The Governor and his Deputies are not a law unto themselves; and they cannot exercise powers that they do not have. They cannot therefore arrogate to themselves the power to unilaterally write off government debt without recourse to Parliament, in clear violation of section 53 of the Public Financial Management Act, 2016 (Act 921).”

By Joseph Ackah-Blay

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