Bank of Ghana: Steve Hanke Says Central Bank Is Obsolete; Calls For Currency Board

• Economics professor Steve Hanke has hinted that Ghana is at a critical stage in its currency depreciation
• The John Hopkins University professor said Ghana must retire the Bank of Ghana temporarily and install a currency board
• The currency board would be expected to aggressively fix the exchange rate to hold the fall of the cedi against the dollar and other trading currencies

As the Ghana cedi continues to tumble against the dollar, US economics professor, Steve Hanke, said the Bank of Ghana must be retired and replaced with a currency board.

A currency board takes away the management of the exchange rate and money supply from a nation's central bank and institutes an extreme form of a pegged exchange rate.

Apart from fixing the exchange rate, a currency board becomes important to maintaining reserves of the underlying foreign currency.

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In a series of tweets on Sunday, the US-based economists lamented that under President Nana Akufo-Addo, things keep getting worse.

"Sky-high food & fuel costs have triggered violent protests. Ghana must mothball its central bank, put it in museum, and install a currency board, NOW," he tweeted.

He also said although the government has averted a planned strike by many labour unions by agreeing to pay workers a 15% cost of living allowance, another wave of protests will soon happen again.

"The 15% increase was way too small to keep up with inflation, which I measure at 50%/yr. So, protests will soon reappear," Prof Hanke tweeted.

Akufo-Addo passes begging bowl to the IMF - Prof Hanke

YEN.com.gh reported in a previous story that the US economics professor has thumbed down Nana Akufo-Addo's handling of the economy, suggesting that the president was begging for the IMF for help.

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He cited the decision to postpone the mid-year budget review this week as evidence that the president and his finance minister Ken Ofori-Atta were looking forward to a loan from the International Monetary Fund.

The finance minister postponed the review until initial meetings with the IMF for an economic programme were completed.

Source: YEN.com.gh