Parliament Starts Breakfast Meetings

Accra, Aug 4, - Parliament today started a monthly breakfast forum to interact with experts and active players in the country's socio-economic life. The forum is part of Parliament's outreach programme to interact with people from all walks of life to discuss topical national issues which have a bearing on the work of parliament and to strengthen democracy. The thrust of today's forum, in which Dr Kwabena Duffour, Governor of the Bank of Ghana (BOG) featured, was the state of the economy, particularly inflation and monetary controls. The forum sponsored by the Institute of Economic Affairs, also focused on the relationship between the Parliamentary Public Accounts and Finance Committees and the Central Bank. Mr Justice Daniel Francis Annan, Speaker, noted that the Central Bank is the first choice for the forum because of the general concern about the management of the economy and the depreciation of the cedi. The Speaker said Parliament wanted to be clear about its statutory and regulatory relations with the Bank in the management of foreign exchange resources. He also mentioned the issuing and control of currency, the handling of monetary policies of government and the efficient operation of the banking and credit system as areas of interest to the House. A section of the diplomatic community and bankers were present at the two-hour breakfast meeting. Apart from Mr Freddie Blay, Second Deputy Speaker, none of the members of the minority group was present. Mr J.H. Owusu-Acheampong, Majority Leader, explained that they are in Saltpond to celebrate the 50th anniversary of the formation of the United Gold Coast Convention (UGCC) from which the Danquah-Busia tradition originated. Dr Duffour said the stability of the cedi on the market is due to the stringent monitoring and supervision measures introduced by the bank over the last month. He stressed the commitment of the bank to make the government stick to financing its budget deficit from non-banking sources to help beat down inflation. The Governor said the economy has made positive gains over the last six months with government spending within its limits but revenue collection slightly below target. Government's efforts to boost food production, if successful, can help attain a single digit inflation by the end of 1998. Dr Duffour projected a 20 per cent rate of inflation by the end of this year. On the operations of the forex bureaux, the Governor said the Bank is strengthening its monitoring and supervision to bring them within the law. He explained that some of the bureaux have gone beyond their mandatory limits and now take deposits and transfer funds contrary to the law. Mr Daniel Seidu, director of the banking division, said the Central Bank has increased its supervisory personnel on forex bureaux to ensure that they work within the law. He said the bank does not have the resources to intervene in stabilising the cedi since it lacked the foreign and gold reserves to do this. Moreover, he said, it is not a viable option to print more cedis. Mr Seidu said the bank's priority is to improve the micro- economic environment to attract investments before introducing new products on the money market. Some of the guests were of the view that tight monetary policies from the central bank have come about as a result of loose fiscal policies. ''The high interest rates are a consequence of the loose fiscal policies,'' Mr Javier Puyol, Resident Representative of the European Union, said. Mr Joe Hyde, a member of the parliamentary service board, suggested that the Bank of Ghana should support entrepreneurs to stockpile excess harvest and release them during the lean season. This, he said, will help control the high rate of inflation associated with the lean season.