Business News of 2014-08-13

Ghanaians United against Dr. Wampah

…NDC, NPP, Civil Society, Business Community want him to resign For the first time in recent history, stakeholders in Ghana including members of government and the ruling party, opposition elements, civil society groups, economic experts, members of the clergy, the business community and ordinary citizens are united against the continued stay in office of the Governor of the central Bank, Dr. Henry Kofi Wampah, following the disastrous performance of the bank’s monetary policy to curb the galloping inflation, run away interest rates and declining value of the local currency, the Cedi. With the local currency adjudged as the worse currency in the world, year-on-year inflation rate rising to 15 per cent and heralding widespread macroeconomic deterioration unseen in the last thirty years, many in the top echelon of the Mahama administration and within the ruling NDC are beginning to point accusing fingers at the Governor of the Bank of Ghana, Dr. Kofi Henry Wampah. Scores of senior government officials including members of the Mahama economic management team are clamouring for the resignation of the embattled governor to pave way for a fresh thinking to turn the economy around and bring back inflation within target of single digit and a stable currency. Similarly, members of the Ghanaian opposition, civil society groups, business community and economic experts have variously expressed lack of confidence in the ability of the embattled Governor to halt the sharp macroeconomic deterioration. They accused the BoG boss of shirking his cardinal responsibilities and the responsibilities of the central bank to ensure general price stability in the economy to protect fix income earners and businesses to plan. “You are seeing almost daily increases in the prices of goods and services in the country unprecedented in recent history of this nation and the Governor is still sitting comfortable in his office, he should resign voluntarily if not he should be forced out. “He is putting his hopes on the Constitution that guarantees his tenure of office, but is also the same Constitution that guarantees the right of Ghanaians for stable prices whenever they go to the market. So if he has failed to deliver on these cardinal responsibilities for Ghanaians then the best he has to do is to honourably resign for somebody competent enough to deliver for the long-suffering people of Ghana.” A member of the economic management team of the Mahama administration told The aL-hAJJ on condition of anonymity. The Ghanaian currency has come under severe strain in the last seven months with Bloomberg adjudging the Ghana Cedi as the worst currency in the world at the moment. According to the Bank of Ghana, the currency has depreciated by about 30 per cent in the last seven months alone, but the Financial times says the depreciation is as high as 40 per cent within this year alone. At the beginning of the year and the early stages of depreciation, the BoG boss came out with very controversial foreign exchange administrative measures to stop the so-called dollarization of the economy and quickly forestall any currency crisis. However, the fire of both inflation and currency instability was inflamed the more after the announcement of the stringent forex measures by the Bank of Ghana. Clamour for the reversal of those measures by the general population went unheeded by the stubborn BoG and its Governor. Many businessmen and officials of financial and corporate institutions told The aL-hAJJ that over the past seven months alone, they have lost almost half of their Cedi assets to foreign exchange depreciation and rising inflation and therefore have no choice than to lay off some of their staff. Those who tried to hold on to their staff on purely humanitarian grounds end up not being able to pay them their monthly salaries with a lot of businesses across the country accumulating huge salary arrears. At the hurriedly organized Senchi Economic Forum, some three months ago, the consensus was that the controversial forex measures introduced to combat exchange rate depreciation are counterproductive and have therefore outlived their usefulness. Participants were therefore unanimous in calling for them to be scrapped to save businesses and prevent them from total collapse. However, the BoG boss was intransigent three months after Senchi forum and had waited until more harm has been done to the economy by further depreciation before he reluctantly reversed the measures just some few days ago in its entirety. It was this dithering in reversing the measures even after the Senchi forum that is raising some eyebrows in government about the motives of the Central Bank Governor. “We do not understand his motivation in keeping the forex measures even after we unanimously asked him to scrap them at Senchi. The people of Ghana deserve something better than this and I think this is the time for the Governor to resign or be forced out through legitimate and constitutional means. It can be done, the same Constitution which guarantees his tenure, is the same constitution that can be used to remove him from office if he decides to keep on to his job at this critical moment,” another senior government member told The-hAJJ. The Governor has also come under severe criticisms for causing Ghana to lose over $400m in cocoa syndication loan for this year’s cocoa purchase. Initially both the government and COCOBOD were targeting almost $2bn in the loan syndication, but information filtering to The aL-hAJJ suggests that government is likely to get about $1.6bn due to what a government official referred to as “Mr. Wampah’s careless okro-mouth”. This is because a lot of the banks refused to take part in the syndication and others who initially agreed to join suddenly pulled out at the eleventh hour ostensibly, for lack of confidence in the Ghanaian economy due to the currency depreciation and general macroeconomic deterioration. But, The aL-hAJJ’s flawless source revealed the reality was that, either deliberately or ignorantly, the Governor of the Central Bank at last month’s meeting of the Monitory Policy Committee (MPC) told the whole world that the under pressure Mahama administration was relying on the incoming $2bn cocoa loan to stabilize the ailing currency, and this didn’t go down with “our development partners, especially the IMF and the World bank”. According to sources familiar with the loan syndication, never in history has this happened to the cocoa sector since the commencement of the syndication in the 1990s by the Rawlings regime under the Governorship of Dr. Kwabena Duffuor. “Dr. Wampah has a lot to answer to the Ghanaian public and he should be bold enough to take the hard decision by himself, or government should be decisive in asking him to resign to protect the people and their purchasing power.” The source said. Minority ranking member on finance and Member of Parliament for New Juabeng South Constituency, Dr Mark Assibey-Yeboah recently accused the Governor of the Bank of Ghana for sleeping on his job and therefore urged him to honourably resign. According to him Dr Kofi Wampah has shown gross incompetence in the handling of Ghana's currency and "must take a bow," he told Joy FM's Parliamentary correspondent Elton John Brobbey in Parliament. The soft-spoken Dr Assibey-Yeboah said the country has had enough of a "sleeping" Governor on duty. "He has done his bit, but he is not up to the task," he chided, adding the country's currency will deteriorate further if the Governor continues to stay in office. He said all the monetary interventions by the Governor are not working because there is no "better research underpinning" those interventions. Dr Assibey Yeboah said the Governor appears to be giving false hopes about solving the depreciation of the currency and must resign. On his part, ace Ghanaian legal practitioner and President of the Legal Advocacy Foundation, Dr. Maurice Ampaw had also called for the immediate resignation of the Governor of the Bank of Ghana and the Finance Minister. He said the inability of Dr. Henry Kofi Wampah and Mr. Seth Terpker to stop the continuous depreciation of the cedi against the major trading currencies in the world is an indication they must not be allowed to occupy such positions. A lot of Ghanaians including the 2012 vice presidential candidate of the opposition NPP, Dr. Mahammudu Bawumia has predicted a further decline of the cedi against the dollar if the current conditions prevail. But Dr Wampah says the decline will end soon and warned persons who continue to bet on the cedi to be careful. Speaking on Kapital Radio’s talk show programme, Editors Couch, Lawyer Ampaw insisted that Dr. Wampah must resign since he cannot ensure the effective implementation of monetary policies to save the cedi from falling. “Right now the Governor of the Bank of Ghana (BoG), so far his two policies have failed if it is a country that we are serious he should resign, Wampah should resign this will never happen in Britain…am calling on him to resign.” He stated.Source: Al-Hajj
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