The Minority in Parliament has served notice of pushing for the Governor of the Bank of Ghana, Dr Ernest Addison, to be summoned in Parliament over the latest exercise by the Central Bank to release new 100 and 200 cedi notes and 2 cedi coin.
According to the Minority, the decision is unjustifiable and thus, the Governor must properly account to Ghanaians.
Addressing the press, the Minority Leader, Haruna Iddrisu said they are pushing for the Governor to be hauled before Parliament because of his “unsatisfactory explanations” for the printing of the new cedi notes.
He also said they will track the process to ensure the money does not end up as funding for the governing New Patriotic Party’s 2020 Campaign.
“The Governor of the Bank of Ghana has given some unsatisfactory explanations for the printing of the high denomination cedi banknotes…what has happened to their promise of a paperless and formalized economy?”
“We hope the amount of revenue to arise as part of seigniorage will not be used for the purpose of funding the NPP campaign and their projects in the 2020 parliamentary elections. We think that the Central Bank must be stopped immediately.”
In addition, the Minority Leader argued that the BoG was exceeding its mandate by engaging in what he said amounted to a revenue creation initiative.
He said the Minority in Parliament was uncomfortable with the BoG’s lack of propriety.
“What the central bank is doing is simply an exercise to raise seigniorage revenue…This exercise is not any prudent monetary policy decision and they should be reminded that their core mandate is not to be a profitmaking institution.”
Mr Iddrisu also raised questions concerning the upgrade of the Cedi with new security features in May 2019 to curtail counterfeiting.
“What happened to the amount of Ghana Cedis the Bank of Ghana made from issuing the upgraded notes, currently in circulation, in May this yea? The government must account properly to the people of Ghana on this transaction as well.”
Why the new notes
In announcing the new cedi notes, the Governor of the Bank of Ghana said the face value of the cedi compared to the US dollar over the past 12 years had eroded due to sustained periods of high inflation and depreciation.
The BoG believes the new notes will address the deadweight burden on the economy from the past inflation and cedi depreciation.
It also said the structure of the banknotes had changed resulting in a shift in demand for higher denominations.
According to the Central Bank, GH¢50 and GH¢20 notes account for about 70 percent of the total demand of notes.
“Introduction of the higher value denominations in circulation are therefore necessary to ensure customer convenience, reduction in the costs of printing and other currency management processes,” the BoG Governor added.
The Bank of Ghana also introduced GH¢2 coins which it intends to gradually replace its lower Cedi banknotes denominations with and reduce printing costs.
In line with this, the Bank of Ghana will embark on “a vigorous campaign among road transport workers, market operators, small businesses, supermarkets, vendors and others to create avenues for the usage of the coins including develop infrastructure for coin usage.”