Bank of Ghana is Highly Politicized and this is worrying!
The past 3 weeks has seen extensive news coverage of the resignation of the Deputy Governor of Bank of Ghana, Dr. Johnson Asiama by the various media houses. From all indications it seems this inadvertent resignation is a political hit job from the movers and shakers of this current political administration. In fact, the former Second Deputy Governor of the Bank of Ghana, Dr Johnson Asiama has revealed that he was pushed out of office by persons who felt uncomfortable with him being in the saddle. According to reports, there were conscious efforts to frustrate him till he exited his position, citing the instance where there was an earlier communication that he had resigned when he was actually at post.
This brings to the question of the independence of the Central Bank and the confidence reposed in them to deliver a sound management of the monetary policies of the economy. It can be recalled that Dr Johnson Asiama was appointed as the Deputy Governor of Bank of Ghana in April 2016 by the Mahama-led administration to replace, Dr Adul-Nashiru Issahaku who was promoted to the position of Governor of Bank of Ghana. In December of 2017, JoyBusiness broke the news about his resignation after barely 19 months in the helm of affairs at the Central Bank with follow-up indications by his lawyers on moves being made by Government to push him out of office.
Actually, Dr Johnson Asiama is left with two more years to the expiration of this contract at the Bank of Ghana. So this action would come at a cost to the state in terms of putting together a better package for him. This is worrying because he may be sitting at home doing nothing, whiles he continue to take his salary, just like what was done in the case of Dr Nashiru Issahaku. In situation where a new Second Deputy Governor is appointed today, that person would be taken her/his entitlements, whiles, Dr Asiama would still be paid.
Banking sector analysts and top executives have expressed a grave concern that the central bank is overtly “politicized”. At a time when the central bank is struggling to assert its independence, with the various banking laws and reforms coupled with stabilising the macroeconomic indicators of inflation, interest rates and foreign exchange rates, this action will once again be seen as an attempt by the politicians to interrupt and manipulate the internal processes of Bank of Ghana. JoyBusiness has chronicled the political interruptions and changes at the top echelon of the Bank over the past 10 years[1]:
1. The current vice president was a Deputy Governor at the Central Bank. He stood on the ticket of the NPP as a vice presidential candidate and lost the election in 2008. He went back to post after losing the election. The NDC government upon assuming office paid him off and ‘kicked’ him out.
2. NDC appointed three Governors in the period 2009-2016; Amissah-Arthur, Wampah and Nashiru. Amissah-Arthur was co-opted into the vice presidency, Wampah was kicked out for being firm on some critical issues including standing firm on limiting central bank financing of the budget and Nashiru also was kicked out after many issues.
3. Then comes Governor Addison who “pulls” along Deputy Governor Afari to work with him after serving together at the Research Department and working for Governor Paul Acquah. Now Johnson is being forced out and his replacement is highly politically tainted and with some strong political linkages, given the early indications emerging of who is likely to be named as the Second Deputy Governor.
The big question now is what would happen if there is a change of government in the next 4 or 8 years and what may happen to the current team. Will they also be forced out in a subtle manner and will the same pattern emerge and be followed through once again?
Though, the Central Bank cannot be entirely divorced from the politicians, I suggest that measures and laws must be put in place to limit their influence over the Bank just like what US has done to The Fed, UK to the Bank of England etc.
[1] https://www.myjoyonline.com/business/2018/January-5th/2nd-deputy-of-governor-of-bog-officially-steps-down.php