Dr. John Kwakye, Director of Research at the Institute of Economic Affairs (IEA), is advocating for a review of the Bank of Ghana (BoG) law to limit emergency support to the government. Apexnewsgh reports
He proposes amending the law to cap such support at 10% of the previous year’s revenue, up from the current 5%. This, he believes, will prevent the Finance Minister from “raiding” the central bank’s vault.
Dr. Kwakye’s concerns stem from the significant advances made to the government during the economic crisis, which exceeded 50% of the previous year’s revenue. While he acknowledges that the Bank’s Act allows for advances up to 5% of the previous year’s revenue, he finds the magnitude of the advance disturbing.
His comments come after Vice President Dr. Mahamudu Bawumia defended the BoG’s actions, commending the central bank for saving the economy from collapse. Dr. Bawumia noted that the BoG’s action was responsible and temporary, as the Bank had only advanced money to the government in two of the past seven years.
Dr. Kwakye, however, remains unconvinced, suggesting that the Minister of Finance’s similar sentiments are not surprising, given that the government is the direct beneficiary of the monetary financing. He believes that amending the law to limit emergency support to 10% of the previous year’s revenue is the only way to prevent the Minister from “raiding” the Bank’s vault.
The proposed review of the Bank of Ghana law aims to strike a balance between providing necessary support to the government and maintaining the central bank’s independence and integrity.
Source: Apexnewsgh.com
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