Interest rates

Togbe Afede XIV hits back at BoG over high interest rates

Togbe Afede XIV, Supreme Chief, Asogli Traditional Zone

Togbe Afede lamented the government’s high monetary policy rate

BOG disagrees with Togbe Afede XIV

Togbe Afede believes that the BoG’s arguments are not justifiable

Togbe Afede XIV said that the arguments made by the Bank of Ghana about its previous submission on the monetary policy rate are “false statements and outright lies”.

He said none of the central bank’s arguments justify the astronomically high monetary policy rates that have weighed on the Ghanaian economy for the past 20 years.

He made the following assertions, saying, “We cannot use ‘higher interest rates to keep exchange rates stable’. It didn’t work for us. Parity laws tell us otherwise. And certainly, high monetary policy rates will not help efforts to remove the “structural bottlenecks” the BoG has alluded to. “

“Second, just as the BoG refers to ‘years of macroeconomic mismanagement’, ten years from now the same reference will be made if the approach to monetary policy formulation does not change. I hope the BoG understands that macroeconomic mismanagement can come from both the budget and the money, ”he explained.

He continued in a report from MyJoy Online, stating: “Third, the aggressive pursuit of profits by the BOG has created a conflict, a moral hazard situation that has been damaging to our economy. They set the rules and determine the price! This must stop and the bulk of the profits made must go to the shareholder, the government, in the form of dividends ”.

“Fourth, open-mindedness is the hallmark of true professionals and decision-makers, and you can’t do the same thing the same way for 20 years and expect different results. I made the same arguments in May 2003 and throughout my tenure on the BoG Board of Directors, from August 2003 to July 2013. After 20 years of failure to control inflation, the BoG must eat a humble pie and adopt an honest, impartial and critical outlook. to their approach and their methods, ”he said.

Togbe Afede added, “It is indeed time we addressed this monetary policy bottleneck that has hurt our development prospects over the years. The consequences are everywhere – in the manufacturing sector, the real estate sector, etc. The sluggish development of our mortgage industry and our inability to meet our housing needs, for example, are in large part a consequence of the high inflation and interest rates that have crippled the long-term debt market ”.

“It is unfortunate that since May 2003, when I questioned the soundness of the BoG’s monetary policy, there has been no open debate on the subject. I urge our economists to take an interest in it. The “independence” of the BoG does not grant it immunity against constructive criticism, ”he concluded.