By Jeremiah Nutsugah
Professor John Gartchie Gatsi, a finance professor at the University of Cape Coast, emphasized the need for an independent central bank that is accountable, transparent, and communicative with the public.
Speaking at the African Center for Governance and Economic Management (ACGEM) on August 16, 2024, on the theme “Balancing Fiscal and Monetary Policies in Africa for Economic Development: The Governance Challenge,” he stressed that Parliament must play a crucial role in ensuring effective oversight of fiscal and monetary authorities.
“The monetary authorities should not be left to operate without scrutiny,” Professor Gatsi said. “They must be held accountable for their actions.”
He also highlighted the need for transparency in monetary policy decision-making, suggesting that the Monetary Policy Committee (MPC) should release a summary of its minutes to explain the rationale behind its decisions.
Professor Gatsi further discussed the challenges of managing the exchange rate and government over-reliance on treasury bills. “Poor exchange rate management contributes to high debt levels and continued borrowing,” he noted.
Regarding government dependence on treasury bills, Professor Gatsi stated that while measures can be taken to adjust interest rates, such actions cannot be sustained in the long term.
“When interest rates drop significantly, it creates opportunities for people to seek alternative investments, such as foreign currency, which can exacerbate the issue,” he explained.
He also mentioned that attempts to deter people from purchasing foreign currency, such as using identification records, may not be effective due to the presence of a vibrant black market for currency.
