BoG governor resigns as economy takes shape

The governor of the Central Bank of Ghana (BoG), Dr. Abdul Nashiru Issahaku, has tendered in his resignation to the President Nana Addo Dankwa Akufo-Addo. His resignation takes effect from April 1, 2017.

The news of his resignation comes barely 48 hours after the Monetary Policy Committee (MPC) of the BoG, which he chairs, reduced the policy rate by 200 basis points from 25.5% to 23.5%, the biggest rate cut taken in over ten years.

The Cedi which began the year at around GH¢4.2, in the first week of March, was trading around GH¢4.8, raising a hue and cry about the rate of depreciation.

But in the past weeks, the value of a dollar has shrunk back to around GH¢4.3.

Analysts feared that the rate of depreciation could have gone as high as 10% by the end of March 2017. But following some interventions by government, the cedi has depreciated by only 5% since the beginning of the year.

Inflation for February 2017 also declined from 13.3 percent to 13.2 percent, the lowest since December 2013 according to the Ghana Statistical Services (GSS).

The monthly change rate for February 2017 was 0.6% compared to the 2.8% recorded in January 2017.

Though is not clear why Dr Issahaku is leaving the position, information available to the thebftonline.com suggests that he cited “personal reasons” for his sudden decision.

The governor who is also supposed to be part of the economic management team of the government, we understand has never been invited to any such meeting since the New Patriotic Party (NPP) took office on January 7, 2017.

The current economic management team of the government is headed by the Vice President Dr. Mahamudu Bawumia who was himself a deputy governor of the central bank before joining mainstream politics.

Dr. Abdul Nashiru Issahaku, was appointed the BoG boss in April, 2016 after his predecessor, Dr. Henry Wampah, resigned.

Prior to his appointment, Dr Issahaku was the Second Deputy Governor and Executive Board member with oversight responsibilities of nine departments including Economics, Statistics, Finance, Legal, Banking Supervision and Financial Stability.

The current board of the BoG who were also appointed into office in September 2016 by the erstwhile John Mahama government., we understand may be changed as the President is seeking legal advice on implication of replacing the governing board that has also four years term to work.

Dr Issahaku’s job has been in the spot light, with opinions divided over whether or not he should resign or stay, since the Nana Addo Dankwa Akufo-Addo-led government took over the administration of the country.

Debate on governor’s exit or stay

While the former Finance Minister and a Member of Parliament’s Finance Committee Dr. Anthony Akoto Osei last month told the B&FT that he believes the governor of the BoG should voluntarily step down, the Chief Executive Officer of Dalex Finance and Leasing Company Limited, Kenneth Kwamena Thompson and Former President of the Ghana Bar Association, Mr. Sam Okudzeto kicked against any move to negotiate the exit of a BoG governor.

“For the purposes of proper governance, he should be allowed to serve his term. I don’t see the reason why the governor, who has been appointed and approved by all, cannot work with the new government. I think as a country we must go beyond the so-called precedence that was set. Let’s do the right thing as we look beyond the personality and look at the institution and see how actions impact on the institutions,” Mr. Thompson told the B&FT last month.

“It is very sad because this whole debate that has been ignited, I believe, has to do with some individual’s personal interest. But Akufo-Addo the President-elect must allow the institutions to work which I think will be to his advantage as well,” he added.

Earlier in April 2016, when the issue came up as to whether the governor must resign his post should there be a change of government, a Former President of the Ghana Bar Association, Mr Sam Okudzeto kicked against any move to negotiate the exit of a BoG governor.

“The law is aware of this, the day of appointment of a governor is not the same as the day of appointment of the government so we must allow the law,” he stressed.

According to him, no governor should be forced out of office whether through negotiations or unconstitutional means.