The Minority in Parliament has announced plans for another protest against the Governor of the Bank of Ghana, Dr. Ernest Addison, scheduled for July 30, 2024.
They accuse him of overspending on the new Head Office building without transparency.
Mahama Ayariga, MP for Bawku Central, stated that despite inquiries, the Governor has not disclosed the current cost of the building, which he alleges has reached $250 million.
Additionally, there are concerns over the reassignment of land meant for the bank’s clinic to the Governor, with details being withheld.
The Minority claims accountability is needed, having previously protested in October 2023 against the Governor and his deputies, blaming them for the Bank of Ghana’s recent financial losses.
“Today the office is being constructed at %250 million dollars. The central bank should be held accountable,” Mr Ayariga stated.
Governor of the Bank of Ghana (BoG), Dr. Ernest Addison has announced that the central bank will require a comprehensive list of individuals and organizations interested in acquiring shares of Societe Generale (SG) Ghana.
Initial reports indicated that SG Group in France, which owns 60.22% of SG Ghana, is planning to sell its shares and leave the country as part of a strategic move.
During a press briefing to announce the policy rate, Dr. Addison responded to inquiries on the matter, stating that the Bank of Ghana has formally informed SG Bank through its subsidiary in Cote D’Ivoire to provide his office with all forthcoming plans regarding share sales.
“I have engaged with their Cote D’Ivoire office and emphasized our desire not to be caught off guard. While we’ve heard rumblings, we want a comprehensive list of potential share buyers. I’ve communicated these concerns to their Cote D’Ivoire office, and we anticipate a response soon,” he remarked.
He clarified that the Bank of Ghana has not received any official communication from SG and is thus taking proactive measures by reaching out to the bank.
“We haven’t received official confirmation from SG, either from their headquarters or their Accra office. Our aim is to ascertain the list of potential share purchasers, and we’ve expressed this concern. Hopefully, we’ll receive a response from the group soon,” he reiterated.
Background information reveals that Hakim Ouzzani, the Managing Director of SG Ghana, previously stated that the news of the bank exiting the Ghanaian market did not originate from the Group Head Office in France. This statement was made during the Bank’s Annual General Meeting in Accra, after which Ouzzani declined further questions.
In a report by Fitch Ratings, it was projected that SG’s departure from Africa would create opportunities for pan-African banks to expand, either organically or through mergers and acquisitions. Despite potential short-term challenges, this move was expected to foster competition and benefit local banking sectors.
SG has recently announced the sale of Societe Generale Marocaine de Banques (SGMB) and its subsidiaries to the Moroccan conglomerate Saham Group, following a trend of African divestments by French banks in recent years.
The exit of highly rated foreign shareholders, such as SG, can pose challenges for divested subsidiaries in terms of credit ratings and access to global financial systems. However, this shift also presents opportunities for local and regional banks in Africa to grow and compete with established institutions.
As French banks refocus on more mature markets in Europe, their reduced presence in African banking is viewed as slightly positive, aligning with their risk strategies and regulatory environments.
Governor of the Bank of Ghana (BOG), Dr. Ernest Addison expressed optimism regarding the stability of the Ghana cedi against the US dollar in the near future.
He attributed this confidence to the robust reserves accumulated by the Bank of Ghana and the implementation of fresh monetary measures along with stringent enforcement of foreign exchange regulations.
Dr. Addison emphasised that the Bank of Ghana’s reserves had surpassed $6.0 billion, marking a significant improvement in the factors that previously exerted pressure on the cedi.
“This is based some strong reserves that the Bank of Ghana has built over the past months to support the cedi, some fresh monetary measures being implemented, and strict enforcement of the foreign exchange regulations.
“We are now reporting reserves of more than $6.0 billion, and therefore the underlying factors that caused those pressures in the past have improved greatly”, Dr. Addison disclosed.
He highlighted increased remittance inflows as well, which are expected to bolster the currency’s performance in the upcoming months.
“We believe that all these developments should give the market some assurance that the cedi’s outlook will remain favourable”.
Addressing concerns about recent challenges faced by the cedi, especially in the first quarter of 2024, Dr. Addison acknowledged a depreciation of about 6.8% against the US dollar.
“These were compounded by delays and uncertainties associated with the second tranche of the cocoa loan inflow and World Bank’s disbursement of budget support”, the Governor added.
However, he noted that measures taken by the central bank throughout 2023 and recent months were beginning to show positive responses.
Despite pressures stemming from the strength of the US dollar in global markets and payments to sectors like energy and corporate, Dr. Addison pointed out mitigating factors such as remittance inflows, mining company contributions, and the Domestic Gold Purchase Programme.
“Inflows from the World Bank, the tight monetary policy stance, and a weaker US dollar from potential policy rate cuts in the USA are expected to support the relative stability of the Ghana cedi”, he pointed out.
He also mentioned expectations of support from inflows, a tight monetary policy stance, and potential US policy rate cuts affecting the US dollar’s strength.
Dr. Addison discussed the revised cash reserve ratio and emphasized the central bank’s commitment to strict enforcement of foreign exchange regulations as measures to uphold the cedi’s performance in the upcoming weeks.
The Minority Caucus in Parliament has issued a fiery response to Dr. Ernest Addison, Governor of the Bank of Ghana, after he dismissed their OccupyBoG demonstration as the work of “hooligans.”
The protest, orchestrated by the Minority Caucus and supported by the opposition National Democratic Congress (NDC), unfolded on Tuesday, October 3, as a vehement denouncement of the country’s economic crisis.
Accusing Dr. Addison of mismanagement and incompetence, the protesters passionately demanded his resignation.
However, the Governor, unfazed by the demonstration, labelled the protestors as “hooligans” and declared neither he nor his deputies would be stepping down. In an interview with the international business website, Central Banking, Dr. Addison deemed the NDC’s protest “completely unnecessary.”
“The Minority in parliament have many channels to channel their grievances in civilized societies, not through demonstrations in the streets as hooligans,” he asserted, referencing the #OccupyBoGProtest.
Unimpressed by this characterization,Mahama Ayariga, the Member of Parliament for Bawku Central, took to the airwaves on the Citi Breakfast Show on Thursday, October 5, to condemn Dr. Addison’s response.
Member of Parliament for Bawku Central, Mahama Ayariga, clearly not amused by the governor’s choice of words, expressed his disbelief on the Citi Breakfast Show on Thursday, October 5, saying, “For one, I could not have imagined that a central bank governor would be so frustrated as to respond that way. To call your members of parliament ‘Hooligans’…How can you describe people who have conducted themselves this way as ‘Hooligans,’ and you are the governor of the Central Bank?” Ayariga questioned.
He went on to narrate the meticulous planning and execution of the protest, led by none other than the minority leader and the national chairman of the NDC, Mr. Asiedu Nketia. Ayariga painted a picture of a peaceful, well-organized protest, emphasizing that they adhered to all the rules set by the police, stopping exactly where they were told to.
However, Ayariga disappointed by Dr Addison’s response remarked, “But I can understand where the arrogance of power has sent some people. In the future, when it becomes difficult to manage our people because they have been branded ‘Hooligans’ and they want to show what ‘Hooliganism’ means, he will come and answer,” declared Ayariga with a touch of defiance during the interview with host Bernard Avle.
Ayariga also shed light on the communication breakdown between him and the governor. In a letter, he sought an explanation for the significant cost escalation in the Bank of Ghana project, but instead of a detailed response, he received a vague reply citing national security considerations. “So, you’re asking us to use alternative ways, and you are refusing to respond to those alternative ways. And then when we decide to protest, you call us ‘Hooligans,’” Ayariga quipped.
The Bawku Central MP further pledged that the minority group would convene with NDC leadership to strategize their next move, vowing to hold the Governor accountable.
“I’m just waiting for our colleagues, for us to have a meeting. We had partners and allies who joined us. So, we’re going to have a meeting. We are going to give him our response.”
However, he made it clear that they wouldn’t conform to the methods preferred by Dr. Addison, who seemed unresponsive to their attempts at communication.
Banks with a capital adequacy ratio (CAR) of less than 10 percent of their assets have been asked to submit plans for recapitalisation, Bank of Ghana Governor Dr. Ernest Addison has disclosed.
The ratio – a principal financial soundness indicator – demonstrates banks ‘ ability to finance their long-term capital expenditures and ventures, and was reduced from 13 percent to 10 percent in December 2022 as part of a slew of measures aimed at mitigating the domestic debt exchange programme’s (DDEP) impact on banks, as they were over-exposed to the Treasury instruments… holding a third of all outstanding cedi-denominated bonds.
Responding to questions about banks’ solvency at the end of the 111th ordinary meeting of the central bank’s Monetary Policy Committee (MPC), Governor Addison stated that the regulator had met with operators of the banks whose capital has been impacted to submit plans for a fresh injection of funds.
“Those banks that are currently reporting CAR below 10 percent will be required to submit recapitalisation plans; in fact, we already met with them last week and asked those banks that have had their capital levels impacted to submit recapitalisation plans for the central bank to review,” Governor Addison stated.
The apex bank’s head added that the processes through which impacted banks can apply for support from the GH¢15billion financial stability fund are being finalised.
In addition to reduction in the CAR to 10 percent, losses from the DDEP are to be reflected in the computation of CAR over a period of up to three years.
Consequently, the industry’s average CAR stood at 15.7 percent in December 2022 compared to 16.6 percent at the end of 2021. The adjusted CAR was influenced by valuation losses on central government bonds, increased credit risk, and revaluation losses on loans denominated in foreign currency, the central bank noted.
For additional context, the industry’s CAR was at a healthier 19.8 percent in December 2020, significantly above the minimum regulatory requirement of 11.5 percent – which was reduced from 13 percent with the advent of COVID-19 as the BoG sought to stimulate private sector lending.
A banking consultant, Dr. Richmond Atuahene, citing a recent study he authored on the impact of the DDEP on the solvency of banks, said the call for recapitalisation did not come as a surprise as there were some banks already walking a tightrope even before the onset of the DDEP.
“I am not surprised this has happened, as we have already seen the moves some banks have made in the past month,” he said with reference to announcements by some foreign-owned banks, including South Africa-based Standard Bank and First Rand Bank, that they are looking to recapitalise their Ghanaian operations, with the former being reported to have set aside 1.5 billion South African Rand (ZAR) – approximately US$81million – to cover potential losses emanating from the DDEP.
He, however, expressed concern that some locally-owned banks might struggle to raise funds, seeing that
the minimum capital requirement for banks was raised from GH¢120million to GH¢400million less than five years ago.
“Some of the local banks might struggle getting their shareholders to commit in raising the required capital, and this could have ramifications for their domestic and international operations – including trade financing,” he said while refusing to rule out the possibility of acquisitions by more stable banks.
The Governor of the Bank of Ghana, Dr. Ernest Addison, is confident that the positive economic outlook would improve the fortunes of the Ghana Stock Exchange despite recent sluggish performance of the local bourse.
The GSE’s Composite Index (GSE-CI) recorded a decrease of about 13 percent as of the end of last year, compared to a 43.66 percent gain for 2021.
However, Dr. Addison said: “The outlook of the economy remains positive and hopefully, a robust economy would improve the fortunes of GSE”.
He said this when a five-member delegation, led by the Managing Director (MD) of the Ghana Stock Exchange (GSE), Abena Amoah, paid a courtesy call on him in Accra.
Already, analysts, including those at Databank Research, are forecasting that the market could return as much as 12 percent to investors this year.
Governor Addison noted that the Domestic Debt Exchange Programme (DDEP) is to facilitate fiscal consolidation, and indicated that the objective is to achieve macroeconomic stability and sustainable growth.
He further stated that the private sector has a key role to play in the transformation of the economy and that private sector investments must lead, with the state providing an enabling environment. He added that the lessons from the current economic events will inform this shift.
The governor also urged the GSE to collaborate with the ARB Apex Bank Limited to promote the idea of having rural and community banks listed.
In her remarks, GSE’s MD highlighted the decrease in equities trading on the local bourse of about 13 percent in 2022, compared with 2021. However, she pointed out that the largest value of about GH¢1.3billion was traded in 2022. This, she said, was attributed to MTN Ghana floating more of its shares on the stock exchange.
The MD added that about GH¢230billion was traded in securities, which, in comparison with the previous year, was low.
She informed the governor that in 2022, GSE was admitted as a full member of the World Federation of Stock Exchangers, placing GSE at par with the major players in the global stock exchange space.
Commenting on the impact of the Domestic Debt Exchange Programme (DDEP) on the GSE, the MD stated that the DDEP being implemented by the government, as a condition for the International Monetary Fund (IMF) bail-out programme, had eroded investor confidence in the country.
To bolster investor confidence, the MD highlighted the need for increased financial literacy engagements, availability of sufficient investment information, and the diversification of products on the market.
On the foreign exchange market, the MD stated that it is the intention of GSE to liaise with the central bank and other stakeholders to form a committee for the formalisation of the foreign exchange market.
The Governor congratulated Ms. Abena Amoah on her appointment as MD of GSE and expressed confidence in her ability to ensure a seamless transition from her predecessor, given her experience in the sector.
In the governor’s team were the First Deputy Governor, Dr. Maxwell Opoku-Afari, and the Directors of Financial Markets, Research, Governors’ Departments and other officials of the bank.
The MD of the GSE was accompanied by the Acting Deputy Managing Director, Frank Berle; the Head of the Ghana Fixed Income Market, Augustine Simons; the Head of Strategy and International Relations, Diana Okine; and the Head of Marketing & Public Relations, Jerry Boachie-Danquah.
Sources close to the Bank of Ghana have called on journalists to be circumspect in their utterances and reportage with regard to the economic managers of the country.
One source who spoke on condition of anonymity to GhanaWeb Business said the country is already facing a difficult time and therefore requires extra precision in the dissemination of news on the economy and public institutions.
The source made the remarks after the contents of a front-page story from the Herald newspaper which sought to create an impression that BoG Governor, Dr Ernest Addison, is unwell and thus left the management of the Bank to the Second Deputy Governor, Mrs Elsie Addo Awadzi.
The source however urged the general public to disregard the false publication adding that Dr. Ernest Addison remains in good health and full control of affairs at the Bank of Ghana.
“I think the vile propaganda should stop. The contents of the story are false and without merit. I have followed the activities of the Bank, including monitoring their Monetary Policy Committee (MPC) Press Conferences both in-person and online and I personally find it difficult to understand why a publication of this kind would be made to create a false impression,” the source said.
“…For instance, If the Governor is unwell, how will he be able to stand for an hour to read the MPC statement and also answer questions from the press every two months. From my assessment, l think he is very healthy and I suggest there is video evidence available on the internet for all to see,” the source added.
The source further pointed out that the BoG Governor has attended numerous public engagements where he has delivered speeches with no sign of ill health whatsoever.
“I can assure you that the Governor is always at post and does not spend his time abroad. The impression that he is always outside the country on medical grounds is rather false and must be disregarded.”
“I will urge Governor Ernest Addison and his Management to focus on their work and not be destructed by the propaganda created in some circles,” the source concluded.
