The Governor of the Bank of Ghana (BoG) Dr Ernest Addison has said the current Act that governs the operations of the central bank needs clarification.
For example, he said there is the issue of an emergency that needs to be properly defined.
What do you call an emergency? He asked and further indicated that “Let us define it very carefully and make clear the conditions under which the rules can be breached.”
Answering a question as to why the Act is being revised instead of an entirely new one being introduced, when he was addressing the 112th Monetary Policy Committee (MPC) press conference in Accra on Monday, May 22, he said “If you look at the current Act, remember they tried to improve on it in 2016 but there were still inconsistencies and difficulties with implementation.
“First is the issue of when you talk about 5 percent measurement, is it a stock measurement? At any time the central bank has claims on the government from 20 years ago so is it that we have a stock claim of 5 percent of the previous year’s revenue or is it the flow starting from a particular period of time?
“How are you going to access that flow relative to the previous year’s revenue of 5 percent? So there are measurement issues there that need to be clarified.”
He added “There is the issue of emergency. What do you call an emergency? Let us define it very carefully and to make it clear the conditions under which the rules can be breached.
“Then even procedural issues in the law are not very clear. Who does the reporting to Parliament? Is it the Governor or the Minister of Finance? All of these issues have to be clarified. In any case, in the Bank of Ghana, most of our reporting to Parliament is done through the Ministry of Finance so the Governor doesn’t have really direct reporting obligations to Parliament. For me, it is not very clear so all of those issues have to be properly clarified in the law.
“I believe that there is the need for those but even if you have the most perfect law, what happened in 2022 would not have been different because the choice would have been either to grind the entire economy to a halt, allow government operations to come to a standstill which is worst than the problem itself so the issue of the law is fine but in an economic crisis things have to be done differently”
He reiterated: “it is important to clarify things in the act so they are very clear. Measurement issues, procedural issues and all of that. I think that that is the position of the Bank, we need to improve it to make these things a little clearer.”
The International Monetary Fund (IMF) had indicated that the Bank of Ghana Act would be revised.
This is to, among other things strengthen the independence and mitigate fiscal dominance by the government.
The Fund said the amendments to the Act would lead to mechanisms to monitor and enforce compliance, and a clear definition of emergency situations under which the limit can be temporarily lifted.
“Pending legislative changes, the BoG and the Ministry of Finance signed an MoU (prior action) to eliminate monetary financing during the programme. An ongoing updated Safeguards Assessment will provide additional support for designing changes to the BoG Act” the FInd said in is report on Ghana.
Ghana has recorded a 10.7% increase in crude oil production in the first half of 2024, marking a reversal in a five-year trend of declining output, according to a report by Ghana’s Public Interest and Accountability Committee (PIAC).
The growth was largely driven by the Jubilee South East (JSE) project, managed by Tullow Oil, which began production in late 2023. This addition to Ghana’s Jubilee oil field helped boost production to 24.86 million barrels by June 2024, compared to a 13.2% decline over the same period in 2023.
PIAC’s half-year report also highlighted a significant rise in petroleum revenue, which surged by 56% year-on-year to $840.8 million by mid-2024. Ghana, a country that began oil production in 2010, depends on petroleum revenue for around 7% of government income. The report further noted a 7.5% increase in gas output, reaching 139.86 million standard cubic feet by June.
Despite the positive trend, Isaac Dwamena, coordinator of PIAC, cautioned that Ghana’s petroleum sector faces both technical and financial challenges. Ghanaian law requires oil companies to allocate at least 12% of project shares to the state, a mandate Dwamena noted can deter investment due to the high cost. “The state can take 15%, 20% carried interest based on negotiations, and that has been a disincentive,” he explained.
To further drive production, Ghana is planning to sell more exploration rights, aiming to harness its fossil fuel resources while also generating funds to support its energy transition. Major oil companies operating in the country include Eni, Tullow Oil, Kosmos Energy, and PetroSA.
President Nana Addo Dankwa Akufo-Addo has called on universities in Ghana to strengthen ties with government, industries, and the communities they serve to ensure that researches are aligned with the needs of society.
That would contribute directly to the realisation of national development goals, he said.
The President made the call at Nyankpala during a ceremony to inaugurate a three-storey multi-purpose building for the University of Development Studies (UDS).
The building fulfills the President’s promise to the UDS during its 25 Anniversary celebrations.
It is named the “Silver Jubilee Building” in remembrance of the President.
The facility boasts of offices, conference halls, lecture theaters, and houses some faculties of the university.
President Akufo-Addo said universities were “breeding grounds” for ideas, researches and innovations that drove the nation’s progress and should remain actively engaged in the development process.
He said government believed in educating the population as the bedrock of a thriving democracy, a vibrant economy and a just society.
The President, thus, outlined some policies implemented aimed at improving access to education at all levels, which included the “no guarantor policy”.
He said the policy had improved access to tertiary education as it had eliminated financial barriers that historically prevented brilliant students from pursuing higher education.
The “no guarantor policy” for student loans increased the numbers of students seeking tertiary education from 443,978 in the 2016-2017 academic year to 711,695 in the 2020-2023 academic year, an increase of 60.3 per cent.
President Akufo-Addo said his government had extended considerable energy and resources to the education sector, recognising it as the most powerful tool to transforming the nation.
He said: “The considerable budgetary allocations within the period totaling some GH¢12.8 billion, amply demonstrates the shared determination of the Akufo-Addo government to ensure that education becomes a catalyst around which the transformation of our nation revolves.”
The Ghana Cocoa Board (COCOBOD) has announced that it will transition to self-financing for the 2024/2025 cocoa crop season, starting in September 2024.
For the past 32 years, COCOBOD has relied on offshore borrowing to finance cocoa purchases through its cocoa syndication programme. However, the organization is shifting its strategy to reduce dependency on external funds.
Speaking to the media on Tuesday, August 20, COCOBOD’s CEO, Joseph Boahen Aidoo, explained that this new approach is expected to save an estimated $150 million.
“Is it good that always COCOBOD should be heard going to borrow? Are we comfortable with that tag? Today, you have heard that COCOBOD is not going to borrow. It is quite a good time for any human being to learn his or her lessons.
“In 32 years, we have learned our lessons and we think that it is high time we wean ourselves from the offshore international financial markets and then finance the crop ourselves here and that is exactly what we are going to do. And I think it comes with a lot of projectory benefits.
“We are looking for $1.5 billion this crop season and looking at the interest rates last year, which were over 8 percent, plus the cost, it means that we can save more than $150 million by the decision not to go offshore.
He also denied assertions that COCOBOD was short-changing farmers with its pricing of cocoa.
“It is not true that COCOBOD is not giving the farmers a fair price. If you follow the narrative, you will notice that from 2017 on, COCOBOD has even been more than fair.
“The government had been more than fair to farmers because this was a time when prices had collapsed but the government and COCOBOD did not reduce the farmers’ price.”
