Economist outlines some reform options for the BoG after 2022 losses

An Economist and financial analyst, Theophilus Acheampong, has listed some reform options the Bank of Ghana can adopt in order to be more operationally independent so as to avert any further losses in the future.

According to him, it is the desire of citizens to have a properly functioning Central Bank.

In a series of tweets on August 14, 2023, he wrote: “The only sure way this can be done is by urgently amending The Bank of Ghana Act, 2002 (Act 612) as amended by Act 918 to mitigate fiscal dominance and strengthen the Bank's independence. Five things can be done [similar to reform proposals being championed by the IMF]:”

1. Impose stricter limits on monetary financing [the current zero financing is a good start, but it must be codified in law, and strong sanctions imposed].

2. Impose clear mechanisms to monitor and enforce compliance, including biannually reporting to Parliament and at least one public broadcast meeting with the Select Committee on Finance.

3. Have a clear definition of emergencies under which the deficit finance limit can be temporarily lifted (See Section 30 of the Bank of Ghana Act, 2002 (Act 612) as amended by Act 918

4. Make public the voting decisions of all the members of the Monetary Policy Committee (MPC)

5. Have some institutional representatives on the Board of the Bank of Ghana (non-executive directors) nominated by their respective bodies. The current status quo is that the President appoints all the Board of Directors as per Section 8 of Act 612 (as amended).

The Bank of Ghana recorded losses up to the tune of GH¢60.3 billion in 2022 due to the domestic debt exchange programme.

SSD/NOQ

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