BoG Governor Refutes Claims of Compromised Independence Amid Debt Exchange Program

The Governor of the Bank of Ghana (BoG), Dr. Ernest Yedu Addison, has categorically dismissed allegations that the central bank’s independence was compromised during Ghana’s debt exchange program.

Speaking on Joy News’ PM Express Business Edition on January 2, Dr. Addison clarified that the program was a necessary response to a national crisis and not a reflection of diminished autonomy.

“The debt exchange program has nothing to do with the independence of the central bank,” Dr. Addison asserted. He characterised the initiative as a “pure crisis issue” designed to prevent economic collapse, emphasising its urgency in addressing Ghana’s dire fiscal challenges.

The governor explained that the program arose from an unprecedented economic crisis that threatened to paralyse the country.

“It was a life-and-death matter for all Ghanaians. At that point, nothing else mattered. Salaries were not going to be paid. There was going to be chaos because nobody was getting their investment returns,” he stated.

Drawing parallels with Sri Lanka’s economic meltdown, Dr. Addison credited the BoG’s role in averting a similar disaster for Ghana.

He noted that unlike Sri Lanka, Ghana retained foreign exchange reserves, allowing the central bank to intervene effectively.

Dr. Addison also addressed criticism surrounding the BoG’s involvement in the government’s economic measures, describing its actions as part of the IMF’s prescribed approach.

“The IMF’s solution required the Bank of Ghana to continue financing the government to maintain stability while we worked on the program,” he explained.

The debt exchange program, he noted, included a debt standstill and a structured exchange to avoid a chaotic default. While acknowledging the challenges faced by government bondholders, Dr. Addison emphasised that the measures were necessary to stabilise the economy and prevent further deterioration.

Responding to claims that the BoG could have done more to mitigate the economic shocks, the governor defended the bank’s actions as the most viable solution under the circumstances. “This was the solution given the situation the country found itself in,” he said.

Dr. Addison reiterated that the central bank’s independence remained intact throughout the crisis.

He highlighted that the BoG’s actions were aligned with global financial frameworks and designed to restore economic stability.

By addressing misconceptions about the BoG’s role in the debt exchange program, Dr. Addison sought to refocus attention on Ghana’s broader economic recovery efforts.

“The recent economic challenges were about survival. Let’s not oversimplify the situation,” he concluded.