Business News of Thursday, 5 February 2015
The Supreme Court has given the Attorney General a-21 day ultimatum to respond to the case in which a lawyer and former banking lecturer, John Ephraim Baiden, is asking the court to compel the central bank to fortify the local currency which suffered massive bouts of depreciation last year.
The court, sitting on the case for the first time yesterday since the last sitting on December 12 when the case was called, ruled that the Attorney General has up to February 24 to file its response –Memorandum of Issues and Statement of Case.
Filing the AG’s response will pave the way for hearing the substantive case — known as John Ephraim Baiden v The Attorney-General and The Bank of Ghana –which was filed in March last year.
Mr. Baiden was seeking among others a declaration that “upon a true and proper interpretation of Article 183(2) (a) of the 1992 Constitution and Bank of Ghana Act 2002, Section 4(b), the Bank of Ghana has neither promoted nor maintained a stable currency for the Republic of Ghana”.
Article 183(2) (a) of Ghana’s constitution says: “The Bank of Ghana shall promote and maintain the stability of the currency of Ghana and direct and regulate the currency system in the interest of the economic progress of Ghana”, and Section 4(b) of the Bank of Ghana Act, 2002, provides that the central bank “shall promote by monetary measures the stabilisation of the value of the currency within and outside Ghana”.
The plaintiff asserts in his case that the level of depreciation of the cedi over time does not show the central bank to be promoting and maintaining a stable currency for economic progress, and wants the court to concur and order the bank to stabilise the currency.
But lawyers for the central bank said the case before the court “is a non-justiciable political question that should be kept out of the court. To state it is prudent, the court should decline the invitation to make orders which do not belong to the courtroom would be stating the obvious”.
Granting the reliefs of the plaintiff, the BoG said, would require the Supreme Court to become either a department of monetary affairs of state, a state monetary advisory court, or to exercise the Ministry of Finance’s functions.
Responding to the issues raised by the central bank, the plaintiff said the BoG’s defence failed to respond to the issues he had raised, pertaining to the bank’s inability to maintain a stable currency. He said the central bank did not challenge his data on the cedi’s performance, and also did not contest the fact it has not been able to promote and maintain a stable currency as the Constitution demands of it.
The case could have a profound impact on economic management, given its invitation to the Supreme Court to define a stable currency and give guidance to the Bank of Ghana on how to achieve it.