ACCRA — The control of money is at the heart of monetary economics. Money in many ways embodies the economic health of any paradise. Money is what any economy presents to the rest of the world to support its monetary systems. Money is also the means by which we achieve economic order in a global market. But the importance of money raises vital questions. A prominent concern is whether the current central management of global monetary economics is feasible in conserving trust and forging fair trade.
In principle the cornerstone of the monetary order designed in the 1944 Britton Woods Agreement has been hurtful for many developing nations, especially Ghana. The contract has only benefitted the Western nations that drafted it. This is part of the reason why Dr. Kwame Nkrumah, the first President of the Republic of Ghana, right after independence in 1957 shunned the use of the British Pound as the currency in the Ghanaian economy.
However, many decades after the Freedom and Liberty marches in Ghana, the country is still tied down by monetary policy that is dictated by the World Bank and the International Monetary Fund. These entities are far from helpful to any nation’s economic aspirations. But then, any nation that becomes aware and chooses to walk out of the IMF per say, is quickly invaded by Western powers – Iraq in 2000, Syria in 2006, Iran in 2008 and Libya in 2009 – to ensure the continuous flow of resources to the West.
The vital objective of the current global monetary system can be summarized. It is intended to carve out a world economy that safeguards the currency underpinning of all economies with the Petro-Dollar. That implies that, the economies of whole nations are engineered to uphold the tenets of the Britton Woods Agreement. International institutions are built to establish overarching measures to protect the high demand of the Petro-Dollar in all economies.
The final import is that developing or underdeveloped economies are scientifically engineered by imperialist regimes – in local faces – ushered in by the West to work for the betterment of advanced economies. The Federal Reserve of the United States of America is the notable culprit. It is a private bank that issues the dollar and it is totally independent of the government of the United States. The Federal Reserve has full authority over the monetary policy of the United States and in fact the world, as the world maintains the status-quo of the Petro-Dollar.
This begs the question of whether the Central Bank of Ghana is an independent bank and independent of the state of Ghana, or not. Even more important, is the question of whether the Central Bank of Ghana is linked in any shape or form to the US Federal Reserve Bank, or not? The answers to these inquiries are invariably, yes. In principle, the US Federal Reserve is the final stop for the world economy. The buck indeed starts there and stops there. It is the burden that pulls every developing nation, like Ghana, downwards, to the bottomless abyss of untold debts and suffering.
In order to understand this relationship, we need to understand how the dollar is tied to every single transaction in Ghana and how every dollar printed in the United States enslaves the ordinary Ghanaian – as well as all those involved in the use of the dollar – in the payment of the interest on that dollar. But before we can appreciate that nuance, we first need to understand how money is issued and who controls the issuing of money in Ghana.
For this reason, we must unveil Act 612 of the law of the Central Bank of Ghana. Section 35 of the law states that the Central Bank has the sole right to issue and redeem currency notes in the country. Of course, there should only be one issuer of note. But, the most interesting issue is that the Central Bank of Ghana, under sections 37(5), 39 and 40, solely controls the issuing of currency in the land – not the government of Ghana in conjunction with the Central Bank.
A subsection of this Act even empowers the Bank to borrow from foreign institutions for its day to day operations without the prior approval of the government of Ghana. In accordance with this act the Bank can also pledge assets to be held as security for the repayment of the loans to international banks without the knowledge of government. Yet, subsection 5 mandates the government of Ghana to guarantee all loans on behalf of the republic. Furthermore, in order for the government of Ghana to borrow money from the Central Bank, a written request is needed for approval by the Bank.
Meanwhile, section 50 of the Central Bank Act follows that the Bank may act as a correspondent Bank or agent for an international banking institution or monetary authority, and that the Bank can effect foreign exchange transactions of any kind entirely on its own. A subsection continues and holds the Central Bank hostage even in the transfer of foreign government securities unless those securities are denominated in convertible currency.
These subservient governing laws of the Central Bank of Ghana cannot be understood in any constitution in any independent nation. Essentially, these are commands to the Central Bank of Ghana – by foreign or international banks – that we cannot do what we please with our own money unless the money can satisfy some functional proportion of our dollar reserves.
If government is the owner of the Central Bank of Ghana why then is the government not the final authority on the issuing of notes? A few sections, notably sections 39 and 40 of the Central Bank Act need to be examined together. A few clauses under these sections dictate that currency must actually cover assets of the Bank in gold. In addition, gold must be available to meet the liabilities of the Bank as represented by the total amount of currency notes and coins in circulation.
More important, part of section 6 directs the Central Bank to set up a General Reserve Fund. At the end of each fiscal year, after allowing for operational expenses, bad and doubtful debts, depreciation of assets, the cost of replacement of currency, contributions to the development and superannuation funds, in addition to other contingencies, the remaining assets of the Central Bank of Ghana must be transferred to the General Reserve Fund and in gold.
In sum, the government of Ghana must make available, assets in gold, to guarantee loans that the Central Bank issues, in order to be eligible for loans herself. Further, the government of Ghana cannot print its own currency unless it has accumulated, in equal value, foreign reserves enough for the Central Bank to issue an amount of local currency in equal measure to that reserve. This squarely situates the monetary policy of the Republic of Ghana exclusively in the hands of the Central Bank and at the doorsteps of the US Federal Reserve.
This begs the question: Is it in the power of the Central Bank of Ghana to be the sole authority of monetary policy in Ghana if it acts as an independent foreign entity without notice to or from the government of the people of Ghana?
For many reasons, Ghanaians are not fully aware that the Bank of Ghana is a kind of correspondent bank or an agent of an international banking institution such as the International Monetary Fund (IMF). In layman terms, the Bank of Ghana is not actually a bank by Ghanaians and for Ghanaians. In fact, it is a bank for Ghana alright, but it is a bank planted here in Ghana by a foreign agency to control our monetary policy. It doesn’t get any colonial than that!
Interpretations of key phrases such as Convertible Currency and General Reserve Fund, which are defined by the Bank are conveniently left out in public explanations about the underlying constitution of the Central Bank of Ghana. This is only to pull the wool over Ghanaian ever-watchful eyes. This is deliberate and it is immoral. The implications of this mafia-law in Ghana are dire.
Per the Monetary regulations – which govern all IMF member states for example – the volume of the Cedi needed to circulate in Ghana’s economy is set to artificially balance the volume of exports through purchasing foreign currency at the stock exchange. This is a double whammy. It is a hex job to forestall the growth and development of a resource-rich nation like Ghana.
The pow-wow works as follows: Ghana sells goods at the global market; the country receives X amount of dollars; the Central Bank buys the dollars at the stock exchange rate; preferably with gold, or other precious metals, and these paper-dollars add to the foreign currency reserves of the Central Bank. The Ghanaian economy is credited with Y amount of Cedis equal to the exchange rate of the X amount of dollars. The system is so nonsensical that simplifying it doesn’t help unless we can concentrate on an example.
Foreign currency can only get into the country through the stock exchange, where it is bought and sold and the respective amount of Cedis based on this unspoken parity rate is injected into the Ghanaian economy. That is, unless we can trade in foreign reserves on the stock exchange, we cannot possibly come up with the money we need to build a clinic in our grandmother’s village.
Say, oil prices rise from 50 dollars to 100 dollars per barrel. The Central Bank of Ghana lowers the dollar exchange rate, buying them for less Cedis and then injects into the local economy the equivalent amount of Cedis – the total amount of dollars exchanged. When oil prices drop, the process is reversed and the Central Bank increases the dollar exchange rate. For each incoming dollar, more Ghana currency is issued.
Any sane human can see the process is backwards. In fact, when should government inject money into the economy? During a boon or a bane? The answer is obvious but in a colonial Ghana, the people work for a fictitious International Institution that controls monetary policy through its agent, the Central Bank of Ghana. This is how the country also foots the interests on any dollar printed by the US Federal Reserve.
Still, there is no doubt that the Central Bank of Ghana regulates the gross volume of the Cedi. The law states that the Board of Directors of the Bank makes decisions regarding the total volume of cash issued into the market and that volume is proportional in every way to the amount of our dollar reserves. Either way, our money is restricted by some functional relationship between the monetary stock inside Ghana and the dollar stock that Ghana receives from international trade.
That makes Ghana vulnerable since it places our economy at the doorsteps of the US Federal Reserve by the token of international trade. If we can’t sell anything to the United States, for example, we cannot fund a Feeder Road to Pampawie, although we need to transport the yam grown in Pampawie to the market at Worawora in order that we can feed the rest of the population. Without this road, the yams in Pampawie rot – the labour and resources used to produce these yams go to waste. This is the kind of impact that such a monetary policy – tying the Cedi to the Dollar – has on our domestic economic reality. No doubt we are poor and we are hungry because of it.
The question is: Are we independent? The simple answer, the only answer, is no. Are we interested in becoming an independent nation? Of course, but unless the Central bank of Ghana can desist from tethering the parity rate of the amount of dollars in our reserves – the gold and foreign currency reserves – to the gross volume of Cedis issued. We have to uncouple ourselves from the IMF since every member of the IMF is obliged to guarantee a single-step exchange rate of the total amount of national currency to the total amount of dollar or pound reserves.
We all admit that this is outright cheating. And it is above all else, excruciatingly immoral. Instead of exporting our gold, why not directly tie the amount of money we issue into our economy to the amount of gold we have?
One can only imagine how the Bank of Ghana could more than fund almost any project in our dear country! Our dalliance with the IMF is the reason any drop in price of any of our traditional export commodities immediately and directly causes a collapse in our economy. Government has often linked such depressions in the past to low taxes and insufficient tax collection systems. But, this is a lie. The reason is obvious. The solutions too are right there for everyone to appreciate. The Cedi must be tied only to the amount of gold we have in this country, not to anything else. Only then, and only then, can we ensure the continued growth of our own economy.
I must emphatically state that the destruction of the present economic system, resulting in the rise in poverty and the abnormal inequality gab in efficient resource distribution is a result of the works of greedy bankers abroad and the Military Industrial Complex that supports their mafia – activities in monetary geopolitics. There is no effort in fostering the welfare of individuals or is there any sympathy in transforming poor nations. The only desire there is, is to satisfy their greed and empower themselves to conquer the world by any means necessary, and position themselves as gods before the poor.
If we follow their directives, every single African nation will remain poor! If we want to benefit from the sweat of our labour and capitalize on our natural resources, we must eschew the current global monetary order and collectively force change. Our domestic banking system must decouple from the IMF. We must issue our own volumes of the Cedi, in proportion to our gold reserves – including that in the ground. We must build networks that can help our financial institutions protect the growth and expansion of private businesses. This is important especially in formulating quality legislation that underpin the operations of all the Central Banks of Africa.
Until we reform and until our government can reach this level of awareness and start working for the people and in the interest of the people, Ghanaians, and Africans everywhere must take a collective stance against an exploitative system.
My advice to stand against the exploitative policies is simple: It is unwise to save with the modern bank. They are cheats and they are only serving the interests of Western Banks. This is the state of imperialism in this country and in this century. We must empower one another to de-stool this current neo-colonial system.
So, how do you save your money? For a short or medium term advice and strategy, I recommend that individuals learn how to invest money in real assets around them. Or, according to the old traditions of our ancestors, you are better of saving your money in a money box, in a hole or under you grass mattress. As a long term strategy, I will advise that you enter into guaranteed investments with trusted individuals or join reliable local investment firms to invest your money in guaranteed ventures. Either way, investments are the best choice or you can tie your money to the end of your cloth and around your waist; just don’t keep your money in a bank – it is a neo-colonial machination.