The Bank of Ghana Headquarters
Truth is Sacred and One and throughout eternity, the Truth will always remain the Same.
Sometime ago, news broke out that the Bank of Ghana, has gone broke and alarm bells started ringing. The opposition NDC, picked up the fight and decided to come out with a litany of condemnations against the Central Bank and vowed to kick out the governor from office.
Is it only today that BoG and its governor have sinned, if what Dr. Ernest Addison has done can be described as a sin?
In 1985, then head-of-state and chairman of the PNDC, collected all fifty-cedi notes from all Ghanaians including the poor, what in truth was debt restructuring. The PNDC promised to refund the money after sometime.
These fifty-cedi notes ended up in Bank of Ghana and the question is what happened to them? Why were the innocent Ghanaians not refunded? So, in such circumstances, can someone call people up to demonstrate and occupy the BoG head office?
From 2013 to 2016, four years running, The NDC government kept borrowing from BoG. At the end of each year, instead of finding money to pay its indebtedness to the Central Bank, the then government would make the bank use its profit to offset its indebtedness. It is like a father borrowing money from his son and at the end of the month, he tells his son “Use your salary to offset the loan I owe you”
This was the relationship between Bank of Ghana and Mahama’s NDC government. This was how GH¢ 1.75 billion ($ 552, 464, 813.71) was lost from Bank of Ghana. Under such circumstances, we should have gathered people to demonstrate and occupy the Bank of Ghana.
Last week, the NDC organised a demonstration and occupied the Bank of Ghana head office, demanding the resignation of the governor, because the bank run a loss of $ 5 billion. And the leader of the pack stands tall to be someone who is in court accused of embezzling €2 million which was meant to purchase ambulances.
We are being told that whenever a company runs into loss, the head must be removed from office, when running losses may not lead into bankruptcy. In fact, running losses are part of business which all is aware. And, for a professor in finance to come on air to say running losses is unpardonable, shows what stuff he teaches his students.
Dr. Addison much earlier, came to explain what went on in Bank of Ghana. Among others, the Central Bank had to keep the economy afloat with debt restructuring and servicing.
And under the current global economic crisis, where many central banks, including some in developed nations are running losses, there is one factor why this is so. Increases in interest rates. Investment rates will go high to attract the public. And lending rates will even go higher and only a few will go borrowing. When that happens, central banks pay out more yields to the customer than it gets from interest accrued on monies it lends out, and they incur losses.
What at all, is the main reason for which the NDC is going after Dr. Addison? During the NDC administration, Sibton Switch System Limited (Sibton Switch) had a contract with Bank of Ghana in a one-sided way which favoured the company. Sibton Switch was to build, operate and own the Ghana Retail Payments Infrastructure.
The Public Procurement Authority approved maximum liability to BoG was GH¢ 300,000.00, but contrarily to this, the corruptly procured contract provided that BoG’s liability was to be GH¢ 2.6 billion ($478 million) over 8,600 times the legally approved one.
After the Nana Addo administration took over the country in 2017, it appointed a new management for BoG which reviewed the terms of contract with Sibton Switch. The new management led by Dr. Addison found out that the company had neither acquired the licence nor fulfilled the conditions precedent for the effectiveness of the rights and obligations for both parties, so it terminated the contract.
Sibton Switch went to the London International Court of Arbitration and sued BoG and prayed for the payment of $ 478 million for breach of contract. It lost the case and was made to pay the cost of legal fees and arbitration incurred by the Bank. In this singular act, Dr. Addison saved the country $1.1 billion which would have possibly gone to the opposition NDC, because the whole cost $100 million and not $1.2 billion stated by the NDC.
Surely, the name Dr. Addison, is not held high within the NDC and by all means, he must be dragged naked in the streets. That was the reason for last week’s negative action by the NDC.
If running losses demands prompt resignation then what can we say about Corporate Ghana? Since 1965 Ghana has been owing debts and running at a loss to this day and age. Where was the (P)NDC from 1982 to 2000 and from 2009 to 2016?
Dr. Ernest Addison did and is doing the best for this country and clearly, those who stand to lose are those who put up effective programmes to steal money from the state, even when in opposition. This is the Truth!!!