The Minority in Parliament is demanding that the Governor of the Central Bank asserts his independence and credibility or immediately resign.
According to the Minority, it is as though Dr Ernest Yedu Addison has been appointed as a Minister by the Akufo-Addo-led government.
This comes in the wake of last Wednesday’s emergency Monetary Policy Committee (MPC) meeting, which increased the policy rate by 300 basis points.
Among other reasons, the Committee said it increased the policy rate from 19 percent to 22 percent due to “heightening of uncertainties in the global economy, rising inflation in many advanced economies and the resultant coordinated tightening of monetary policy stance by major central banks”.
“Under the circumstances, and considering the risks to the inflation outlook, the Committee decided on a 300 basis points increase in the Monetary Policy Rate to 22 percent.”
In a statement to announce the decision, the Central Bank said it is not getting access to the international capital market, putting constraints on domestic financing.
As a result, it had gone for overdraft “to close the financing gap as reflected in the mid-year budget review”.
“The Bank of Ghana is working with the Ministry of Finance to agree on a cap on the overdraft.”
This is where the Minority is convinced the Central Bank is working just to favour government at the expense of policy credibility.
“Consequently, the NDC Caucus in Parliament hereby wishes to remind BoG again that it has all the independence and powers to engineer a move away from the current fiscal dominance that we are experiencing,” the Caucus said in a statement issued by Leader Haruna Iddrisu on Friday, August 19.
“Most of [Bank of Ghana’s] actions in recent times are surprisingly schemed to accommodate financing of government, without regard to the negative impacts of such dominance.
“This is undermining the credibility of its policy decisions and needs to be curtailed.”
The Minority, therefore, wants Dr Addison to resign immediately like his counterpart in Egypt if he cannot be firm.
“The Governor of BoG must assert his independence and credibility or immediately resign as his counterpart in Egypt has done.
“Governor Tarek Amer resigned only yesterday following criticisms over his handling of the country’s financial challenges which have seen the Egyptian local currency depreciate significantly against the US dollar in recent times.”