Lack of coordination between the fiscal and monetary authorities in gov’t worrying - Gideon Boako

Dr. Gideon Boako, Deputy Ranking Member of Parliament’s Finance Committee, is concerned. He sees a lack of coordination between fiscal and monetary authorities in government.

On March 29, he posted on Facebook about the Finance Ministry's handling of Treasury bill rates. He warned that their approach conflicts with the Bank of Ghana's monetary policy decisions. This disjointed strategy undermines economic stability.

Dr. Boako criticized the government's "artificial" drop in T-bill rates. He questioned how they feel now that this has been reversed. The Bank of Ghana raised the policy rate by 100 basis points, from 27% to 28%. This contradicts the Finance Ministry's efforts to lower T-bill rates from 29% to as low as 15%.

He also asked why the Central Bank isn't managing excess liquidity more aggressively for price stability. Dr. Boako praised the Bank of Ghana for its new policy direction. This includes plans for a 273-day instrument to strengthen sterilization measures.

He remarked that at least the Central Bank Governor listens, unlike the Finance Minister. He believes this move will support disinflation, an area where he feels the Finance Ministry has struggled.

Additionally, he pointed out recent undersubscription in Treasury bills during two auctions on March 21 and March 28. He stated this reflects poor fiscal management.

Dr. Boako urged the Finance Minister to recognize that macroeconomic management is vital for national financial stability. The ongoing policy incoherence between his ministry and the Central Bank shows a troubling lack of coordination.

He called on the government to align its fiscal policies with monetary measures to prevent further economic instability.