Amissah-Arthur Enters Fray

Mr. Paa Kwesi Bekoe Amissah-Arthur, Governor of Bank of Ghana has been nominated to become the Vice President. 

Posted on: www.dailyguideghana.com

By William Yaw Owusu

Accra, Thursday August 2, 2012.

The government on Tuesday confirmed that Paa Kwesi Bekoe Amissah-Arthur had been nominated by new President John Dramani Mahama to become his Vice subject to the approval of Parliament.

The nomination of the current Governor of the Bank of Ghana (BoG) was made possible following the sudden death of President John Evans Atta Mills on July 24.

Opinions continue to vary over his nomination and before he assumes the hot seat, expectations are already high.

He comes on board as a technocrat whose quest to ensure economic stability might not be in doubt.

The nomination of Mr. Amissah-Arthur comes at a time when the Cedi continues to depreciate against major foreign currencies.

The situation would not be new to him as he has been at the helm of affairs at the Central Bank since October 2009 taking decisions to control foreign currencies in relation to the Cedi.

The daily depreciation of the Ghana cedi against major currencies has become a headache for economic managers of the country. The cedi, which from January to June 2009 suffered a rapid monthly depreciation of about 3 percent, slowed down considerably to 0.9 percent in July 2009. It bounced back in mid 2010 and remained relatively strong for some time. However, since January 2012, the cedi has continued to depreciate against the major currencies.

Some analysts attributed the decline to the surging demand for the dollar and other currencies by both local and foreign investors, and businesses mainly to cover import bills and that compelled the government to set up an economic management team and economic advisory committee to address the situation but the measures do not seem to work and Renaissance Capital has even predicted another 5% to 10% depreciation is likely by (the end of 2012).

In fact, the Governor has been part of the country’s economic management dating back to the 1980s when he served as PNDC Deputy Secretary for the Ministry of Finance and Economic Planning and later as Deputy Minister in the 1990s at the same Ministry following Ghana’s return to constitutional rule.

However, IMANI Centre for Policy & Education has welcomed the nomination of Mr. Amissah-Arthur, describing the move as ‘fantastic’.

Kofi Bentil, vice president of the think tank, in a statement yesterday, said the Governor has the potential to reach out to the middle-class and the intellectual community which the ruling NDC has in its recent life greatly distanced itself when he becomes Vice President.

He recalled how the Governor impressed them with his conduct of the affairs of the Monetary Policy Committee (MPC) in particular, saying “though there is evidence that other aspects of the Bank’s work, such as banking inspection, have also improved.”

IMANI is of the view that Mr. Amissah-Arthur has the capacity to work under pressure for political forces, stating that as governor he was able to go beyond moral suasion in compelling the banks to reduce interest rates in spite of pressure from politicians.

They said he was also able to rebuke the government in a diplomatic way in paying contractors since hesitation in payment has an effect on non-performing loans in the system, and by extension lending rates.

The Vice Presidential nominee has supervised an era of stable inflation as Governor. Until the President’s death, inflation rate stood at 9.40 per cent (June 2012).

Historically, from 1998 until 2012, Ghana Inflation Rate averaged 17.9200 percent reaching an all time high of 63.0000 percent in March of 2001 and a record low of 0.4000 per cent ( May of 1999).

However, critics of the government say the effort was not enough as it did not reflect realities on the ground. They argue that a country with single digit inflation should encounter high prices of goods and services which have resulted in high cost of living but the President’s economic management team have always insisted Ghanaians are better off under them.