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A legal practitioner has petitioned the Attorney-General (A-G) to prosecute the Governor of the Bank of Ghana (BoG) and other top officials of the bank over the sharp fall in the value of the Ghana cedi.<\/p>\n
Dr John E. Baiden is urging the A-G to go behind the BoG over what is known in law as \u201clifting the corporate veil\u2019\u2019 and hold the top officials of the central bank responsible for the woes of the cedi that have affected the general economy and individuals.<\/p>\n
He wrote the petition under the auspices of the Liberty Institute Law firm, a firm he founded that seeks to advocate justice and liberty in the country.<\/p>\n
Dr Baiden\u2019s contention was that the BoG had failed in its mandate to stabilise the cedi, as stipulated by Article 183 (2) (a) of the 1992 Constitution and Section 4(b) of the Bank of Ghana Act, 2002 (Act 612).<\/p>\n
Cedi compromised<\/strong><\/p>\n According to the petitioner, the BoG had compromised the Ghana cedi.<\/p>\n \u201cIt is out of line and must be brought back in line, as our laws demand,\u201d the petition stated.<\/p>\n The petitioner expressed the hope that the A-G would explore the probable cause of the decline in value of the national currency and \u201cinitiate prosecution against those behind the BoG corporate veil for the unlawful damage they have caused to our cedi \u2014 earned, gifted, invested and saved\u201d.<\/p>\n \u201cHopefully, prosecution will bring about conscientiousness and deterrence. Unstable currency equals unstable country. Ghana can do better,\u201d Dr Baiden averred.<\/p>\n The petition was dated May 5, 2022 and copied to the President, the Speaker of Parliament, the Minister of Finance and the BoG.<\/p>\n Hardships<\/strong><\/p>\n Dr Baiden was of the view that the interbank exchange of the cedi to the dollar, which was more than GH\u00a27.61 (as of the time he issued the petition), had resulted in astronomical increases in the prices of all essential items such as food, fuel, utilities and transport fares, which had led to untold hardship and misery in the country.<\/p>\n \u201cThe cedi depreciation is not abating; putting the entire population in a panic mode because general incomes and salaries are stagnant, unchanged and, for some, worsening due to the present adverse economic conditions and a result of the unstable cedi,\u201d the petition stated.<\/p>\n Management of cedi<\/strong><\/p>\n It further indicated that the current hardship as a result of the depreciation in the cedi\u2019s value had been made worse by the BoG\u2019s inability to put in place policies and systems to properly manage the currency.<\/p>\n It said since 1992, the BoG had employed a system known as the \u201cfree floating exchange\u201d to manage the cedi against other currencies, which was based on the demand and the supply of foreign currencies.<\/p>\n The system, it noted, was best employed if a central bank had substantial reserves of foreign currency to intervene whenever demand outstripped supply to reduce the pressure on the local currency.<\/p>\n Lack of reserves<\/strong><\/p>\n According to the petition, the BoG lacked the reserves to make any substantial impact to stabilise the cedi in the event demand outstripped the supply of a foreign currency, especially the US dollar, which had been the phenomenon for many years.<\/p>\n \u201cThe BoG cannot continuously employ a floating exchange rate regime to manage the Ghanaian cedi when it knows that it lacks the requisite reserves to effectively intervene on the market to give the cedi a stable value. The BoG\u2019s inability to manage the floating rate regime puts the Ghana cedi in perpetual flux,\u201d it added.<\/p>\n The best option to manage the cedi, it explained, was for the BoG to move away from the free floating regime and adopt \u201cthe law of one price\u2019\u2019 or the purchasing power theory, which allows a country to peg its currency to that of a foreign country, such as the dollar.<\/p>\n \u201cIn pursuing our monetary sovereignty, there is nothing that prevents us from rolling back or resetting our currency with the US dollar. An exchange rate roll back to July 2017 or 1:1 ratio is a \u2018status quo ante\u2019 or restitution,\u2019\u2019 the petition said.<\/p>\n Source: graphic.com.gh<\/span><\/p>\n \u00a0<\/p>\n \u00a0<\/p>\n Featured Video\n<\/p>\n\n
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