The Central bank with a mandate of inflation targeting, regulatory oversight as well as monetary governance ought not to be reckless in recent times to augment our present economic quagmire.
The BOG which is supposed to comply with it Act 918 section 3 ft0 which is the Central Bank financing to government should not exceed 5%( of previous year government revenue 2021 which is 70billion cedis).In 2022 the Central Bank engage in a total advances to government to a tune of 44.5 billion cedis representing(56%). This clearly amount to a breach of the BOG act.
This misguided actions of the Central Bank is orchestrating the unbearable inflatlationary pressures, depreciation of the currency and the destabilization of the overall macroeconomic environment as well as undermine it own monetary policies which tend to increase cost of credit thereby affecting the real sector of the economy.
The BOG in an attempt to justify this reckless decision is rather eroding investor confidence by alluding to government inability to access the capital markets hence the need to finance government policies and programs. This in my view is totally unwarranted because of the implications on fiscal deficit and general instability to the economy.If BOG had refrain from this recklessness it would have compel government to live within it means( Rationalize Expenditure) to impact positively on fiscal governance and the debt operations policy of the government.
Again BOG referral to the suspension of the fiscal Responsibility Act 982 by Parliament which has allowed government to spend in times of emergencies should not be a springboard for the BOG to be reckless.As far as I know section 30 of the BOG’s Act has not been set aside by parliament to warrant such colossal advances.
There is also a similar occurrences with regards to the GOLD FOR OIL policy where the asset of the BOG is being depleted in a reckless manner without replacement.
I will urge parliament to exercise it oversight responsibility properly and crack the whip where necessary to restore sustainable monetary policy governance.
MICHAEL OFOEI AKORLI
NDC DEPUTY EASTERN REGIONAL COMMUNICATIONS OFFICER