Former Deputy Minister of Finance and Economic Planning, Mona Helen Quartey says the FX Development Committee’s mandate to find ways to improve the management, transparency and long term structure of Ghana’s foreign exchange flow is unnecessary.
According to her, the cedi’s depreciation is not as a result of the country’s foreign exchange flow, rather the current flow regime is only a symptom of a bigger problem within the country’s economic structure.
“When you look at flows, its one part of the whole problem. The problem falls into monetary sections and also into a fiscal section, fiscal discipline and fiscal stabilization and so forth. So really it’s not just about flows, it’s bigger than flows.”
She added that “if this committee is supposed to shadow the Bank of Ghana treasury then honestly it’s an unnecessary effort because the committee cannot complement the work of Bank of Ghana.”
“Constitutionally we see in article 183 (2)A and 184 that the Bank of Ghana was set up to clearly do certain things with respect to the cedi and how foreign exchange impacts it. They are permitted to disallow any foreign exchange transaction,” she explained on JoyNews’ Newsfile, Saturday.
“So even as we speak about flows, the Bank of Ghana is the one who can say yes or no to what is accounted for and what is not accounted for although we all know that there is a lot that leaves this country in the form of foreign export that is not accounted for.”
She said that even if the committee is successful enough to monitor the flow of foreign exchange, the information gathered might not be useful as the flow only remains a symptom to a bigger problem.
“So you can monitor flows but what would you do with that information and even that information on its own cannot resolve the issue of the depreciation of the cedi.”
The committee is illegitimate
Madam Mona Quartey further questioned the legitimacy of the committee. According to her the law only permits the Bank of Ghana to handle tasks of such interest and allows for Parliament to play a supervisory role.
“So in terms of the law, the constitution only allows the Bank of Ghana to handle this task.”
“The only authority that can oversee this activity is Parliament and in the constitution, 184 it says that Parliament is to request Bank of Ghana to bring reports to show what has been going on so they can act or give them advise and recommendation on that,” she said.
Explaining further, Mrs Quartey said the committee is not legitimate because it is yet to receive Parliamentary approval even though it was set up by the Finance Ministry.
She said the task ascribed to the committee demands a Parliamentary approval.
“I believe that if the task is to do with Central Bank activity, monetary policy, looking at the foreign exchange rate, interest rate and so forth then it falls under the Bank of Ghana’s role which is clearly stated in the constitution.”
According to her, it was also wrong that before the creation of the FX committee, the major players; the Finance Ministry and the Central Bank did not come together to release a statement informing the general public of their intention to do so.
“Now if there’s the need to further align or enhance this role, it is for the joint group to come out and tell us that there is now going to be an FX committee. I have to say I have not heard anything in the news from Bank of Ghana saying that they’re part of this effort even though they’re on the committee.”
“Three years into the management of the economy nothing had been done, but just as we are going into elections you set up a committee.
“When will the committee finish its work and take this small aspect of managing the cedi depreciation and feed it into the Ministry of Finance’s work of fiscal stabilization together with the Bank of Ghana’s work on price stabilization to give us any result?” Mona Quartey quizzed.
According to her, the creation of the FX committee was just a move by the government to manage the expectations of Ghanaians as the country nears the polls. She concluded that the end game of the FX Development committee was a political one.
“I understand the PR aspect of managing the expectations of Ghanaians because Ghanaians are beginning to ask questions.”