Should Ken Ofori-Atta resign or be sacked by President Akufo-Addo?

Ghana is a very interesting country with interesting people. We seem not to be serious with very serious national issues. All we do is talk and no action. We have reduced ourselves to moving from one crisis or story to another without resolving that crisis. A couple of weeks ago, the noise was on illegal mining popularly known as Galamsey.

Then, attention shifted to the finance minister, Mr. Ken Ofori-Atta and this week it was Mr. Adu Boahene, the dismissed minister of state at the finance ministry and de facto deputy finance minister following the Anas expose, which was filmed in 2018. In a few weeks, it would be another scandal and we moved on.

Meanwhile, illegal mining, high inflation, and the falling cedi continue to rake havoc on the nation. This article is a contribution to the debate on whether the president should sack his cousin as the finance minister or not.

The genesis of some Ghanaians including some NPP MPs demanding the head of the president’s confidant and cousin, his financial guru in charge of the country’s economic management is the recent free fall of the Ghanaian cedi against the US dollar and the current precarious economic situation the country is in.

Many Ghanaians, including some of the ruling party’s MPs, are of the view that the finance minister has mismanaged the financial affairs of the country and therefore, he must go. Is it really true that the free fall of the cedi and the current dire economic situation is the result of mismanagement by Ken Ofori-Atta? If so, then, what about the Vice-President who heads the Economic Management Team?

I differ from those who claim the current economic problems facing Ghana are the direct result of mismanagement by the finance minister. First, the word mismanagement is a relative term, and therefore one’s understanding of it may be different from another. In fact, whilst the majority in the opposition party, NDC will want to attribute the situation to mismanagement, the majority in the ruling party, NPP will differ.

Those who are of the school of thought that the present economic situation is mismanagement by the finance minister are only looking at the symptoms and not the root causes. For example, the finance minister as well as the president, and leading members of the ruling NPP have attributed the economic situation to COVID-19 and the Russia-Ukraine war and not mismanagement.

Others have asked why neighboring countries are not experiencing a free fall of their currencies since they were also affected by the same COVID-19 and the Russia-Ukraine war.

As always, in Ghana, we often talk about the symptoms of the problem but fail to diagnose the real causes of the problem. There are a number of factors that have caused the current financial meltdown in Ghana. The real reason is that the international financial markets have lost confidence in the finance minister and that has resulted in the free fall of the cedi against the US dollar and other major currencies.

It’s similar to what happened to the pound sterling when the former finance minister, Kwasi Kwarteng announced unfunded tax cuts and the markets lost confidence in him leading to his dismissal.

Why have the international financial markets lost confidence in the finance minister? There are a number of factors or reasons why the markets have lost confidence in the finance minister, which I will address.

The first is the untouchable status of the finance minister because he is not only the cousin of the president but also the individual who used either his bank or his personal position to raise funds for the president’s three presidential campaigns before he finally won the presidency in December 2016.

In fact, it was claimed by the NPP MPs who went to see the president to demand the dismissal of the finance minister that they were asked by the president, where were they when Ken Ofori-Atta was raising funds for his campaign.

Because of this status, the role of the finance minister to say, no to the president in the area of financial policy decisions as well as the president supervising the finance minister are either non-existence or blurred. As a result, the two have teamed up to spend the nation's resources as they see fit instead of in the national interest.

Second, the finance minister is almost above reproach. For example, he does not seek approval from parliament before making certain unbudgeted expenditures. A typical case is the expenditures on the National Cathedral. No budget was presented to parliament on the Cathedral, yet the finance minister spent huge sums of public money to pay for preparatory work on the Cathedral when the president told the public that the state would not fund it.

Indeed, it’s the president’s pet project and therefore the minister has the blessing of the president for spending public money that has not been budgeted for as well as not seeking approval from parliament.

Another factor is the double role played by the finance minister and his private equity bank. It is public knowledge that his bank serves as a transactional adviser to his ministry in securing loans for Ghana for a fee. There is absolutely nothing wrong with that.

After all, the finance minister is a Ghanaian and his bank employs Ghanaians as well the money made from the services as a transaction adviser belonging to a Ghanaian company. So it’s a win-win not only for the finance minister and his company but Ghana as well.

However, there are two major problems with this kind of arrangement. The first is a potential conflict of interest. That is, are the accountability systems in Ghana effective and robust enough to ensure that this is not inside dealing (the finance minister influencing the decision to select his bank as transaction advisers in the bidding processes either directly or indirectly)? Is the bidding process transparent enough to ensure that the finance minister is unable to influence the decision in favor of his bank?

In my view, though Ghana’s Commission for Human Rights and Administrative Justice cleared the finance minister from conflict of interest, the international markets do not believe that the accountability systems are transparent and robust enough to stop the minister from influencing the decision-making process in favor of his bank. This is because the minister is too powerful and no one could challenge him within his ministry if indeed he did influence the process.

Another factor, which is more disturbing to the international financial markets is the dual role of the finance minister and his bank. As a transaction adviser to his ministry when Ghana borrows money from the international markets his bank benefits from it and therefore, there is an incentive on the part of the finance minister to borrow more from the international markets so that his bank will make more money by way of fees charged to the state.

That could be the motivation or reason behind why the finance minister was not in favor of Ghana going to the IMF because that arrangement will not require a transaction adviser and no fees but money directly from the IMF to the government of Ghana with his bank not gaining any fees. This could explain why Ghana’s external debt has ballooned under the finance minister.

There is also the question of the accuracy and reliability of the financial data reported by the finance ministry. In fact, the international financial markets have doubts over the figures reported by the ministry. This is because some of these institutions have their own way of obtaining data and information on Ghana.

Others also suspect that the reluctance of the finance minister to go to the IMF was because it could be found out if the ministry’s reported data were inaccurate and that the true state of the economy could be worse than reported.

The markets also suspect that the president is reluctant to dismiss his cousin's finance minister for the same reason. , the next finance minister may unearth the inaccurate reporting as well as the possibility of not willing to do the president’s bidding when it comes to unbudgeted expenditures such as hiring expensive jets for his travels and funding the National Cathedral.

I understand the president has asked for time for the finance minister to lead and complete the IMF negotiations. That is a wrong decision by the president for two reasons. First, the minister was against going to the IMF, so why should he lead the Ghanaian team when he opposed it?

Second, and the most important is, why let him negotiate an agreement that he would not be there to implement? Is it not better to dismiss him now and appoint his replacement who will implement the agreed program to continue the negotiations? The president can only delay the inevitable but it is unavoidable.

The markets have lost confidence in Ken Ofori-Atta for the reasons above and the longer he stays in office the more damage his presence will cause to the cedi and the economy. The earlier he is dismissed the better in the same way Kwasi Kwarteng and Lis Truss were thrown out of office when the markets lost confidence in their economic policies.

At the moment the minority in parliament has moved a censure motion for the removal of the finance minister and the Speaker has set up an eight-member fact-finding committee to probe the grounds for the motion and report to parliament. My view after listening to the committee in two sessions is that nothing will come out of it because, it’s the usual party political politricks, instead of bi-partisan cooperation.

Again, no party in government would move against its own minister at the initiative of the opposition. Therefore, the motion will not receive the two-thirds majority required to remove the finance minister because NPP MPs despite wanting the minister dismissed would not do the bidding of the minority NDC.

In the current situation of the president being unwilling or unable to sack the finance minister, the minister not willing to resign on his own accord, and parliament incapable of removing him through the censure motion, my humble advice to the finance minister is that his cousin the president is finding it almost impossible to dismiss him.

However, his continued stay in office will do more harm than good to the cedi and the Ghanaian economy. Therefore, for the sake of the cedi and Ghana’s economy, he should resign willingly and save his cousin from doing the unthinkable. Relieve your cousin from the burden of having to sack you and resign honourably. Nipa beye bi, nna yambeye niyinara.