“The losses the Central Bank has incurred are unprecedented and it will take us years to recover. The Bank of Ghana over-exposed itself to the government,” says a senior lecturer at the University of Ghana Business School, Prof. Godwin Alufar Bokpin.
In an interview on Peace FM's morning show 'Kokrokoo', he stated that the losses suffered by the BoG have limited their ability to perform their duties with moral authority in the financial market.
The big elephant in the room
The Professor of Finance blamed the government for the current state of the BoG, stating that Ghana's problem is mainly governance and not economics or finance.
“The government is the big elephant in the room. This is what they have done to the Central Bank . . . and we said it long ago that a time will come when we will say how the Central Bank together with the government messed up our financial system. This is the result. What we are seeing on the books of the Central Bank is a true reflection of what this economy has gone through . . . I’m not sure the Governor of the Bank Of Ghana is happy having this on his CV,” Prof Bokpin told Kwami Sefa Kayi.
None Holy
According to Prof Bokpin, the Central Bank's problems predate the current administration and both major political parties share responsibility.
“Between the two main political parties (NDC, NPP) there’s none holy, no not one”.
He said BoG situation “should lead us to a national conversation that helps insulate certain national institutions from political capture".
According to the Economist and Professor of Finance, “we could have minimized this whole thing; it was very clear that government needed to cut wasteful expenditure and you would have protected the balance sheet of the Central Bank, because it got to a time the Central Bank had to make a difficult decision: they either allow the regime to collapse and the economy developing into a full-blown crisis or they will compromise their integrity, operational independence to sustain the government on its balance sheet. The result of that is the losses we are counting right now”.
Source: Peacefmonline.com
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Never mind the Ndc ***barred word*** their minority leader could not even facilitate the common order of ambulances without chop chop. Worst of all, he Ato Forson is disgracing Ghana by speaking terrible English. Clearly indicating that he knows nothing.
What do you consider as wasteful expenditure? You and many who think like you are lucky to be alive and saved from COVID-19. Nana Addo and the NPP government should have saved the economy in 2020 and 2021 from COVID-19 and its effect on humans. Those who could have survived will be alive today. Simple cholera killed over 200 people in Ghana and I am sure none of them were your relatives so you can talk the way you are talking. The late Sir John would have preferred to be alive and poor than dead now. We don't value what we have!
@ Sena Ahiabu, please refer what you are saying to Prof Bokpin not Dan. Dan's comment is based on what Prof Bokpin said, so if you think that what is currently happening at the bank of Ghana is beyond someone's understanding, fine. What about Prof Bokpin, you mean he also lacks knowledge in economic issues even though he is a professor in that field or he's also wearing political lenses?
these are the professors who are making the academics lose respect. when you allow propaganda to dictate to you instead of your brains, you stop making sense
As a Professor in Finance, although I want all citizens to express themselves freely but sadden by Professor Bokpin's analysis. Isaac said it all. I don't know whether Professor Bokpin really understand the implications and consequences of economic collapse in country like Ghana? It means general unrest, businesses collapsing, rush of citizens to withdraw their money from banks (bank run); possible overthrow of elected government etc. But this Professor is talking politics (about independence and integrity of Bank of Ghana), like NDC minority leader which has a PhD in finance. Disappointing and I feel that Professor Bokpin sacrificed his independent thinking and integrity big time. I think that Bank of Ghana enhanced its integrity and respect by serving Ghana as a government bank.
Mr. Professor, what is the purpose of a central bank? So, if you were the governor, you would allow the economy to collapse and then what economy would you be managing? In a period of economic crises, you are talking about independence. Eeii prof. You see why you are training students who cannot think outside the box to solve problems. No wonder industry players continue to cry about university products these days. If we have people like you as economist and professionals teaching in our universities who only laments in the country, then we have a long way to go.
@Dan, this is beyond your understanding so let somebody who understand banking with no political prejudice explain to you. After that google US federal reserves and Bank of England how they write off government bad debts or impairment.
Interesting conversation but we cannot only theorize the issues here but need to be pragmatic. My view is that no good manager of a central bank would allow the economy of a nation to collapse to protect its independence and integrity. The cost of economic collapse has catastrophic effect not only on citizens, businesses and the banks including central bank of Ghana. All central banks around the world including Bank of England, Federal Reserve would take steps to prevent the economy of a nation from collapsing. That is practical and prudent thing to do. Remember that Central Bank is a banker to the government and like all banks, they try to prevent businesses/customers for collapsing when ever they can. For me, central bank did the right thing and people should know that Dr Addison's own integrity is not an issue here. He made a right call. If the economy collapsed, many banks would have collapsed and the central bank's bailouts to these banks would have led to massive loses similar to the amount declared as loss by Bank of Ghana.
Interesting revelations. The bank of Ghana has a whole unit called " banking supervision division" .From what we are being told, can the bank of Ghana look into the face of any commercial bank in Ghana and say " hey, you are not doing well" since they seem not to be practicing what they preach. If a pastor/ religious leader is known to be a ***barred word*** jumping from one woman to another even though he is married, can he look his congregation in their face and tell them " hey, adultery is not good, the bible frowns on it"? Or is a case of " don't mind what I am doing, you follow what the holy book is saying. Asem oooo. 'Ghana en nye hia Mai , ya ye mobo Dudu' .Ghana is not a poor country but our case is very pathetic. So what do we do now since we can't all sit on one chair. I don't know, am just asking.