The central bank of Ghana is mandated by law to have overall supervision and regulatory authority over banking & non-banking financial business in the country. Ensuring a sound, efficient financial system, and management of the economy as a whole, were all under the leadership of Dr. Henry Kofi Wampah.
Furthermore, he was responsible for ensuring a stable financial system for wealth-creation, economic growth and development.
Bank of Ghana Governor Dr.Henry Kofi Wampah was confirmed by President John D. Mahama on April 2, 2013 after acting from 2012. Dr. Kofi Wampah was mainly responsible for the following functions and responsibilities as defined by Act 612 and Act 673.
To regulate, supervise and direct the banking system and credit system to ensure the smooth operation of a safe and sound banking system
To consider and propose reforms of the laws relating to banking business
To ensure depositors’ funds are safe
To ensure that solvency, good quality assets, adequate liquidity and profitability of banks are maintained
To make sure adherence to statutory and regulatory requirements is enforced
To ensure fair competition among banks
To maintain an efficient payment system
To implement the law governing banking operations, provisions regarding licencing, withdrawal of licence, and arrangement for examining & monitoring banks’ powers and duties, as well as protection of the supervisor.
Legacy and Impact
The banking sector in Ghana experienced a significant growth and expansion in terms of the Minimum Capital Requirement for its operation, and the number of commercial banks in Ghana increased during the reign of Dr. Henry Kofi Wampah between 2012 and 2015. Banks like First National Bank, Soveriegn Bank and many others secured their licence to operate during Dr .Kofi Wampah’s leadership as Governor of the central bank. Moreover, a lot more savings and loans institutions also go licences to operate as commercial banks. Examples are Capital Bank, Royal Bank and GN Bank.
Again, the recent out-going Governor of the central bank Dr. Kofi Wampah is credited with the policy introduction of a cashless economy and introducing E-Card payments systems like the E-zwich, and GH-Link.
The introduction of these payment systems have to a large extent reduced the rate and level at which customers and citizens carry cash. Most important is the fact that National Service Personnel countrywide presently receive their allowances on the E-zwich card, which is now a business avenue for the banks.
Another positive contribution of Dr. Kofi Wampah to the country is how he has transformed the core function in the banking sector, and expansion of balance sheets in the banks from when he became governor to now have increased by a considerable percentage.
Setbacks in his reign as central bank Governor
Dr. Wampah’s reign as Governor of the central bank had a lot of setbacks because of what is alleged by some industry experts as lack of experience on his part. Ghana’s monetary and fiscal economy has experienced a lot of turbulence during the reign of Dr. Kofi Wampah as Governor, with the major setback being depreciation of the cedi against major trading currencies on the market.
Ghana, which is considered Africa’s rising star and is a big exporter of cocoa, gold and oil, has been dogged by large budget deficits, ballooning public debt, and inflation that consistently tops government targets — which all happened under the Wampah-led administration. In an attempt to fix the crisis, he imposed forex rules that made it unlawful for individuals to withdraw money from their dollar accounts in any amount more than US$10,000. And this policy strategy of the Wampah-led administrations came under serious fire from both experts and ordinary citizens.
The Wampah-led administration also failed to take decisions such as Forex control measures, as well as management of recent developments in the microfinance industry; wherein millions of cedis have been locked up due to poor supervision of its operations.
Furthermore, the Bank failed to effectively monitor DKM Microfinance — a small firm that lost millions of cedis of its customers’ deposits before it had to be liquidated. Unfortunately for Dr. Kofi Wampah, the President in his State of the Nations Address made reference to the failure and collapse of effective monitoring and management of DKM and other microfinance companies which were under his watch as Governor.
Some experts and individuals in the banking industry are not much surprised by these happenings in the microfinance sector, because of the controversial sale of Merchant Bank to Fortis which most consider to be a fraudulent transaction that also happened under Dr. Wampah’s administration.
The Governor, Dr. Kofi Wampah, during his last month in office faced a series of calls for his resignation from government and some opposition party members as a result of the central bank’s failure to monitor well the operations of the Microfinance companies — especially the DKM saga and the arrest of his son-in-law over narcotics, but Wampah dismissed suggestions that he was being forced to step down due to all these controversies surrounding his administration.
Expectations for the incoming Governor of the central bank
Industry players and experts expect the new central bank Governor to be strong, resilient and independent while discharging his duties; and he must be able to strike a balance between his office and government. The new Governor is also expected to take bold risks in reducing the policy rate to balance economic growth.
Moreover, bankers and citizens of Ghana will have higher hopes and expectations for anyone appointed as Governor of the central bank by the President. Paramount among all these expectations will be his (the Governor’s) ability to put in place policy measures that control depreciation of the cedi and keep inflation at an acceptable rate. This is very important to both investors and citizen, since it’s an election year and government expenditure is likely to go very high.
Monetary and Fiscal policy management of the country is of much importance and concern to stakeholders, investors and business owner of the country, since it’s a determinant of the country’s growth when properly managed. Again, the new Governor’s ability to properly regulate and enforce policies to monitor the operations of all the microfinance companies and other financial institutions in the country.
Conclusion
The Wampah-led administration, in spite of its setbacks, increased the minimum capital requirement of commercial banks; introduced and pushed the cashless economy agenda; and allowed more banks to come into the country during his reign as Governor of the central bank.
Dr. Henry Kofi Wampah said during his last days in office as the governor of the central bank: “I told him (the President) I wanted to leave office early, and we have agreed that I will exit at the end of March. It is only fair to leave early in order to give enough room for my successor, whoever it might be, to settle down before we get to the elections”. He said one of his two deputies, either Millison Narh or Abdul Nashiru Issahaku, was expected to serve as interim central bank Governor until Mahama chose a permanent successor. Congratulations to Dr. Henry Kofi Wampah for his contribution to the country as Governor of the central bank.
We congratulate Dr. Abdul Nashiru Issahaku who has been named the new Governor of Ghana’s Central Bank.
Author: Jelili Jerry Afolabi
