The Bank of Ghana (BoG) has lost focus on its core mandate of regulating the banking industry in a way that nourishes the country’s macroeconomic stability, warns the immediate past President of the National House of Chiefs and the Agbogbomefia of Asogli, Togbe Afede XIV.
“Bank of Ghana has lost focus, competing with the banks for profits, instead of contributing to the macro-economic objectives of stability, growth and employment creation,” Togbe stated.
He made the observation while addressing a Parliamentary delegation, led by the Speaker, Rt. Hon. Alban Bagbin, which had made a courtesy call on him at his Palace.
The former House of Chiefs President blamed part of the problem on the amalgamation of the two roles of Governing Board Chairman and Governor of the Central Bank, which at the moment is personified by Governor, Ernest Addison.
According to Togbe Afede XIV, although the independence of BoG is good, there is the need to separate the Central Bank Governorship from its Chairmanship to engender some checks and balances.
“Yes, Bank of Ghana’s independence is desirable. We all accept that it should be so. This independence is the more reason why we need in-built “internal check and balance” and improved transparency, through the separation of the positions of Chairman and Governor of Bank of Ghana,” the business mogul said.
He added, “I want the best for my country. I think it’s about time we look at the Bank of Ghana Act and go for a separation between chairmanship and governorship. It’s important that we seek improvement in everything that we do and remove lapses wherever we find them, at least for the sake of the future. Our people are suffering, and our youth are suffering from joblessness. These are threats to our security and our future.”
The Agbogbomefia of Asogli also bemoaned what he described as unfair high-interest rates among commercial banks in Ghana, saying while these banks fleece borrowers with high-interest rates, they only give back paltry part of the good money they make to depositors whose monies they lend out.
“Now, how do the high-interest rates help in managing the economy when the high interest the banks charge is not even shared with depositors? At Ecobank, interest expense was only 12% of interest income in January to September of this year. This meant that out of every GHS100 Ecobank made in interest income, it paid out only GHS12 to depositors. At Standard Chartered Bank, the interest expense to interest income ratio was 20%. At GCB, it was 20% and at SGSSB, it was 21%.”
According to him, based on the cashing out from high interests, the banks are making an “incredible amount of money” at the expense of the people, industry, the private sector, the government, and at the expense of our growth. “Why do we have to set interest rates so high?” he asked.