Ghana: MP criticizes Bank of Ghana for weilding too much powers

Posted: February 4, 2010 in Economic Reporting
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The Member of Parliament for Manhyia, Dr. Matthew Opoku Prempeh, has stated that financial consumers in the country are being cheated, as a result of too much power vested in the Bank of Ghana (BoG).

According to him, the BoG, because of the power vested in her, has become an industry player and at the same time a regulator, a situation he noted was not in the best interest of Ghanaians and the financial sector.

“After the passage of the Banking Act, too much power has been concentrated in the Bank of Ghana. The Bank of Ghana cannot regulate our banks and at the same time be an industry player. This is not right, Madame Speaker,” he noted.

Dr. Prempeh was contributing to a statement made by Mr. Hackman Owusu-Agyemang, MP for New Juaben, on the establishment of a Financial Service Authority (FSA) and an Ombudsman, on the floor of Parliament on Wednesday.

He said the 80 percent membership of the Bank of Ghana, serving on its Monetary Policy Committee was not the best for the financial industry, and therefore called for its review, citing the practice in the United Kingdom as an example.

“Madam Speaker, I have had the chance to look at the membership of the Monetary Policy Committee and found it to be very infectious. This is not working for the industry and employment in this country,” he fumed, giving the statistics of the membership of the UK Monetary Policy Committee to buttress his argument.

The Monetary Policy Committee of the UK is made of nine members- the Governor, the two Deputy Governors, the Bank’s Chief Economist, the Executive Director for Markets and four external members appointed directly by the Chancellor. The appointment of external members is designed to ensure that the MPC benefits from expertise, in addition to that gained inside the Bank of England.

But in Ghana, membership of the Monetary Policy Committee consists of seven members -five from the Bank of Ghana and two external members appointed by the Minister of Finance. The meetings are chaired by the Governor of the BoG.

He referred to the situation where money was paid into MPs account as gratuity and later withdrawn by the Bank of Ghana into its vaults on the orders of the President, describing it as terrible, and that which does augur well for our democracy.

“Madam Speaker, this is not good for our democracy. It is not good for granting confidentiality if these things continue to happen,” he noted, adding “we have to separate the financial regulation from the Bank of Ghana, and more importantly establish a Financial Service Authority and an Ombudsman so that those of us who are being cheated can go there and seek redress.”

Mr. Justice Joe Appiah, MP for Ablekuma North, Mr. Anthony Osei Akoto, MP for Tafo and Mr. Haruna Iddrisu, MP for Tamale South and Minister of Communications, all added their voice for the need to establish a Financial Service Authority and an Ombudsman.

Earlier, Mr. Hackman Owusu-Agyeman accused the BoG for lacking the authority and capacity to chaperone the interests of the ordinary Ghanaian or businessman, and therefore, called for a fresh look at the banking sector and put to place a regulatory mechanism that will enforce equity and fairness and a resolution mechanism for issues and or grievances that may arise.

“With the present modus operandi of the Monetary Policy Committee, the Bank of Ghana, I dare say, will have no moral authority to play the role of unbiased, fair and firm regulator, and of the people’s interest,” he said.

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