Investment Banker and Agbogbomefia of Asogli State, Togbe Afede XIV has reacted to Bank of Ghana’s (BoG) response to his recent statements on the country’s monetary policy figures, saying that the Central Bank’s responses are “outright lies”.
He says the explanations given by the Bank of Ghana are false misrepresentations of the real economic indices and a deliberate attempt to deceive both the public and business community.
At a recent courtesy call on him by the Speaker of Parliament, Togbe Afede expressed concern over the Central Bank’s governance structure and high, lending and monetary policy rates.
He compared the current situation to that of the United Kingdom and challenged the Bank of Ghana to be better managers of the existing disparities for a congenial financial environment.
But the Bank of Ghana, in a six-page response, discounted Togbe’s assertions and heavily defended its robust financial interventions, describing the comments by the former President of the National House of Chiefs as deceptive.
“The interest rate floor of the policy corridor are completely different for the two economies. And for that reason, the rate at which the Bank of Ghana's Monetary Policy rate will be effective in helping manage liquidity and achieve the price stability objective, is constrained by the debt service cost and public sector borrowing requirement dynamics on interest rates. It is therefore completely erroneous and misleading and spurious analysis to simplify the monetary policy stances comparison with just the overall debt-to-GDP comparison of two completely different economies with different fundamentals”, the Bank of Ghana argued.
In a rebuttal, however, Togbe Afede pointed out that, the responses from the BoG are “lame, and failed to address the core issues I raised”.
He said, none of the BoG's arguments justify the astronomically high monetary policy rates that have burdened our economy over the past 20 years.
“It is unfortunate that not since May 2003 when I questioned the soundness of BOG's monetary policy has there been any open debate on the subject. I would urge our economists to show some interest. The “independence” of BOG does not grant it immunity from constructive criticism. BOG must demonstrate genuine commitment to stability, growth and employment generation”, Togbe Afede added.