Ranking Member on Parliament’s Trades Committee, Murtala Mohammed, says the Bank of Ghana (BoG) cannot be blamed for the harsh economic situation the country is plagued with. According to him, the Akufo-Addo administration must be blamed for the current crisis.
He explained that even though some policy measures by the Bank of Ghana have heightened an already dire situation, it should not be forgotten that the Central Bank is not entirely independent of the Executive arm of government, thus the current administration has a hand in decisions taken there.
Speaking on JoyNews’ PM Express, he said “I’ve listened to my good friends there and they all seem to be blaming the Bank of Ghana, it is the government who should be blamed; the President, the Vice President and the Minister for Finance for abysmally, disastrously managing this economy. They are those who should be blamed.
“So I’m not surprised that they’re saying that when they go to the Bank of Ghana, the Bank of Ghana blames the Ministry of Finance; they go to the Ministry of Finance, the Ministry of Finance blames the Bank of Ghana. It will be the height of naivety to assume that the Bank of Ghana is absolutely independent of the executive. All the economic policy decisions for which reason we’re in the mess for which we are is occasioned by the policies of this government.”
He was reacting to comments by the Ghana Union of Traders’ Association President, Dr. Jospeh Obeng, who had blamed the Bank of Ghana for failing to find a viable solution to the worsening inflation situation.
According to him, the Bank of Ghana’s resort to hike monetary policies has merely served banks and not the general public who have instead been hit hard. He added that the monetary policy hikes have rather contributed to the inflation situation rather than reduced it.
However, Murtala Mohammed believes, the policy decisions of the government is what is to be blamed. He noted that the government has failed to control the country’s penchant for relying on importation of goods, some of which could be produced in large quantities locally.
He said the failure of the government to enforce the strict importation restrictions that the erstwhile Mahama administration had left behind has driven imports at an all-time high and thus putting even more pressure on the cedi.
“We are spending over 2billion dollars annually importing [rice and poultry products] into this country. Just in 2016 we were spending about 500million dollars importing same. So if you’re spending over 2billion dollars on the importation of rice and poultry products within a year, what it simply means is that every year you need to look around to get the over 2billion dollars to import those products into your country.
“You don’t buy them with cedis. Now if you’re taking 2billion dollars every year, it certainly will exert pressure on your domestic currency and that is the problem. Look why is it that in 2014 we were able to reduce the importation of rice into this country by 40% and there was a surge in production of local rice by 60%? It was as a result of a visionary policy decision.
“So we at the Ministry of Trade, the GUTA people know, recently I heard them lamenting over decisions taken by this government in which they were not involved. He knows that when we were in government, I was the Deputy Minister for Trade, we had an open-door policy for them. And they could call me …as late as 1am and we’ll talk.
“There was no single policy decision we took at the Ministry of Trade that involved trade that we didn’t involve them, not even a single one. But policy decisions have been taken, formulated without them. Why are we not where we are?” he said.
He has thus suggested that the government revisits some of its policy interventions to stall the further depreciation of the cedi.