BoG’s Cedi Massaging Exposed

Australia-based Ghanaian economics professor has exposed the Bang of Ghana (BoG) for deliberately manipulating economic figures to hide the true impact of the depreciated Ghanaian cedi.

In a recent column published widely online, Prof. Ntim said, the managers of Ghanaian economy from the Bank of Ghana to the Ministry of Finance are under-reporting government’s real spending as they using external financing and monetary policy to mask the effect.

However, this cover-up has been exposed by the abysmal performance of the local currency on the forex market.

“In the past, stability of the cedi depended largely on exogenous factors such as commodity price shocks, uncertainty in the financial markets, global financing conditions, energy shocks, crude oil imports, as well as other fiscal pressures.

In the current circumstances, however, where the cedi is recording its worst performance since 2016, the pressures appear to be largely self-inflicted and coming from deliberate fiscal under-reporting and reliance on external financing coupled with monetary policy inertia,” he wrote.

“Whereas the government is to blame for the fiscal issues and the financing thereof, the Bank of Ghana appears also to be under-estimating the problem and attributing the phenomenon to a number of untenable reasons. For instance, in a recent interview the Central bank said it was due to an adjustment in its reference rate (under a supposed floating regime), and also pressures from the government’s revenue mobilization and expenditure choices. The central bank further said the pressures were coming from payment of some energy-related debts which had forex components. Again, this raises questions as to whether the Bank of Ghana did not capture these in its 2019 forex cashflow projections as it should.”

The economic expert advised the Akufo Addo administration to be transparent with the situation as a way to solving the debilitating pressure on the local currency.

“To address the current pressures on the cedi effectively, the first solution is for government to become transparent about the true fiscal situation while the Bank of Ghana works on its 2020 foreign exchange cash flow to effectively capture all projected payments. This will guide its market intervention strategy going forward.

These measures should be coupled with drastic fiscal adjustment that involves expenditure rationalization and revenue enhancing efforts to stem the fiscal pressures,” he said.

Professor Ntim’s indictment on the BoG syncs with recent alerts by the National Democratic Congress (NDC) Member of Parliament for Bolgatanga, Isaach Adongo who recently accused the BoG of cooking figures.

Adongo charged in a recent statement: “Which serious country will learn from BoG, a central bank that cooks monetary policy data unless the Dr Addison-led central bank is able to conceal this from them as it had tried without success to conceal same from the Ghanaian people?


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