Reports emanating from the Bank of Ghana (BoG) paint a gloomy picture of a dysfunctional institution. It has been buckled by lack of effective control and massive administrative lapses, and this is beginning to raise concerns among management and staff.
The Herald has been informed about how the Governor of the BoG, Dr Ernest Addison, has lost control of the institution to the 2nd Deputy Governor, Elsie Addo Awadzi, who has been taking the day to day administrative and operational decisions of the Central Bank.
Insiders, have attributed Dr Addison’s inability to manage the Bank effectively to ill-health, saying he has since late 2021 been spending more time outside the country attending to his health needs, including having to undergo a specialized heart-related surgery in the UK at a point.
The Herald learnt that the BoG boss, has drastically reduced his stress level and spends less time in the office even when in the country. He is mentioned as less active these days and mostly operating from home after ceding most of the administrative duties to the 2nd Deputy Governor.
Claims are that, DrAddison’s many medical trips abroad and absence from administrative duties, created room for the printing of over GH¢41 billion worth of new notes for the Akufo-Addo government in 2022, leading to the hyperinflation that the country is witnessing now with living conditions getting worse by the day.
While, working on this story, the International Monetary Fund (IMF) has appointed a Swiss-funded financial supervision adviser to provide technical support to the BoG as the West African nation strives to obtain executive board approval for a $3 billion bailout.
In a statement on Tuesday, Ghana’s central bank, said the placement of the Irish born Kenyan, representative is to continue cooperation between Ghana, the IMF, and the Swiss State Secretariat for Economic Affairs.
The adviser, Leonard Chumo, began his assignment on February 6 and expected to stay for three years and help support the bank’s implementation of Pillar 2 and 3 of the Basel II and III capital frameworks, and strengthen its risk-based supervisory framework, the statement said.
Recently, ace broadcaster, Dr Randy Abbey, has hit hard at the Governor for reportedly printing over GH¢41 billion worth of new notes for the government in 2022. However, insiders have attributed the situation to Elsie Addo Awadzi, saying she is the one calling the shot not Dr. Addison, as many think.
Dr Randy Abbey, had charged saying “the issues of the central bank and what we keep hearing about what the central bank is doing, is extremely troubling, and it must worry anybody living in this country.
“As we speak, per the IMF programme, we are told that now the government has printed GH¢41.9 billion, which is about $3.3 billion. This is money the central bank has printed for the government against all the rules.
“The level of seeming recklessness and lawlessness, and irresponsibility when it comes to the operation of the central bank and the lack of transparency, is getting worrying,” he said.
Speaking during his Good Morning Ghana programme on Wednesday, February 8, 2023, Randy Addy, said that the BoG, which is supposed to be regulating the country’s financial sector, appears to be breaking all the rules in the sector.
He said that the BoG in 2022, denied the claims of some members of the minority caucus, including the current Minority Leader, Dr Cassiel Ato Forson, that it was illegally printing money for the government, but it turns out the claims are true.
He added that the central bank using back doors to print more money, is one of the reasons why Ghana continues to see high rates of inflation.
The broadcaster called on Parliament to summon the governor to explain why he keeps flouting the Constitution of Ghana.
Randy Abbey, made these remarks while reacting to a Bloomberg report that indicated that the BoG printed GH¢41.9 billion for the government in 2022. The central bank is yet to respond to the report by Bloomberg.
The Member of Parliament (MP) for Afigya Kwabre North and a member of the Parliamentary Select Committee of Finance, Collins Adomako-Mensah, said that the House did not approve the printing of the GH¢41.9 billion by the central bank.
In July 2022, the then Minority spokesperson on Finance, Cassiel Ato Forson, accused the government and the BoG Governor of printing more currency for the country without approval from Parliament.
The former Deputy Finance Minister, said the BoG and government, have perpetuated an illegality which must be dealt with.
“Between January and June 2022, the Minister responsible for Finance and the government went to the Central Bank, and they encouraged the BoG to print money worth GH¢22 billion. They have printed GH¢22 billion fresh money without the knowledge of Parliament and without informing all of us”, he said.
Ato Forson, said this is hidden on page 97 of Appendix 2a of the mid-year budget under the section on BoG.
Speaking to journalists after Finance Minister, Ken Ofori-Atta, presented the government’s mid-year budget to Parliament, Ato Forson, said the new currency has resulted in the high inflation being witnessed in the country.
“I am saddened, no wonder inflation is galloping, no wonder that our reserves position is dwindling. Because when you create new money out of thin air, what happens is that inflation, will go up and obviously because it is new money, you will end up losing your reserves because there would be new consumption. If this trend continues, I won’t be surprised that we will end the year with inflation of about 50 percent,” he added.
He also urged the Governor of the BoG, not to repeat his unlawful action, but rather seek parliamentary approval when the need for the printing of fresh notes arises.
“I want to urge the Governor of the central bank that he has engaged in gross illegality and in future, if he is asked to print money, he should first come to Parliament before he acts.”
The Bank of Ghana said it deemed it necessary to provide clarity on the issue and to set the records straight.
Minority leader, Dr Cassiel Ato Forson, has raised serious concerns about the government’s gold for oil deal which seeks to reduce the prices of petroleum products in the country.
Speaking to Prince Minkah on Dwaboase programme on TV XYZ, the former Deputy Minister for Finance, alleged that the BoG is secretly printing cedis to give to the Precious Minerals Marketing Company (PMMC) to purchase gold for the government.
“Where is the BoG getting money to purchase to give to PMMC to purchase the gold? ” Dr Forson asked while pointing to the illegality that is surrounding the policy.
“The Bank of Ghana has secretly printed 50 billion cedis this year without a Parliamentary approval. He did that with Finance Minister Ken Ofori-Atta and we don’t know where the money has gone,” he said.
He explained that the secret printing of cedis begun in 2020.
“From 2020 till now, the Bank of Ghana has printed 90 billion cedis. 40 billion 2as printed between 2020 and 2022. This year alone, they have printed 50 billion cedis,” Forson disclosed.
Dr Forson, who is the MP for Ejumako-Enyan-Essiam Constituency, also indicated that the Minority will hold the Governor of the Central Bank accountable for the illegality.
The ‘Gold for Oil’ policy is to buy oil products with gold rather than U.S. dollar reserves.
It is meant to tackle dwindling foreign currency reserves coupled with the demand for dollars by oil importers, which weakens the Ghana cedi and increases living costs.
Speaking at the 2022 AGI Awards in Accra, Vice President Dr. Mahamadu Bawumia explained that Ghana’s gold for oil program will give Ghana the space to accumulate more international reserves as the country will save the $3 billion it spends on oil imports.
He added that the use of gold was specifically for oil imports in the face of declining foreign exchange reserves.
However, Dr Ato Forson, believes the deal is marred by corruption as he explained that the government did not buy oil with gold in its first transaction under the policy.
“They bought the oil with dollars; they didn’t buy with gold as we were told. Even with that, instead of buying the oil at 95 dollars per metric tonnes, they bought it around 101 or 105 dollars per metric tonnes.
“This means there is a middle man somewhere who is making 5 dollars profit around the deal,” Dr Forson noted and assured that his side of the law-making chamber will unveil the face behind that illegality.
