Amissah-Arthur Defends Economy

Paa Kwesi Bekoe Amissah-Arthur

By William Yaw Owusu

Accra, Tuesday August 7, 2012.

In spite of widespread complaints that there is high cost of living in the country, the Vice Presidential nominee and Governor of the Bank of Ghana (BoG) Paa Kwesi Bekoe Amissah-Arthur says the general prices of goods and services have not risen.

“For the first time in the history of this country, for 24 months, inflation has been single digit. It means that pensioners and people who rely on fixed income are not as worse off as it would be in a situation where inflation was in double digit. So you can have particular prices but the general level of prices has not risen to the extent that we know in this country.”

Appearing before the Appointments Committee of Parliament in Accra yesterday, the out-going Governor said “the point is that while we are not very happy with some of the developments, the general thrust of economic development is good and I think we have to recognize that.”

Mr. Amissah Arthur whose nomination was made possible following the elevation of the incumbent John Dramani Mahama to the position of President after the death of President John Evans Atta Mills on July 24, defended the government’s economic management style and but admitted that prices were rising albeit at a slower rate.

He admitted that the Cedi depreciates especially during election years and said the currency’s performance in election years was recorded in 2004 and somewhat in 2008 adding “in 2012 we have had substantial depreciation.”

“It’s an election year and the Cedi has depreciated. We have had a growth in import level that is unprecedented in just one year. That has affected us in a way. It hasn’t been worse than this. Despite that we have only had 17% of depreciation during the course of the year.”

“There is a greater danger of fiscal excess so people take pre-emptive measures. We have had a huge increase in import this year so we have had pressure on the cedi. In May we had more than 5%, but in June it was 3%. We are expecting that this will continue to the rest of the year.”

As you may know, the level of imports into Ghana doubled, oil imports tripled and that put immense pressure on the foreign exchange resources and we had to do things in order to stabilize the situation.

Mr. Amissah-Arthur said what has come to be known as the dolarisation of the economy needs frank assessment of the situation to ensure that there is amicable solution to the problem.

“Ghana has one currency called the GH¢. In previous times, in order to create confident in the economy, governments have allowed people to hold deposits in dollars. In many countries you cannot go to the bank and take dollars across the counter.”

He said “we became very liberal and allowed the people to this. What we found was that there were many instances where people went to the banks and sometimes wanted to take as much as a half a million dollars across the counter. For anti-money laundering considerations, we thought that this should not be encouraged.”

He said the central bank as a result put a limit of $10,000 on the amount of foreign exchange that one could take from Ghana adding “We think that we must reverse this situation.”

Mr. Amissah-Arthur, commenting on the common currency (ECO) for the sub-region said Ghana has performed well in especially the last two years, achieving two out of the three main points in attaining the convergence criteria.

He cautioned ECOWAS to be careful in designing the common currency since the Europeans were grappling with how to control their common currency in wake of the Eurozone crisis.

He also said he was not in favour of taking separating the supervisory and monetary functions of the central bank because events in Europe had shown that consolidating all the functions under one umbrella body had helped to check financial irresponsibility.