News Guide Africa

Tag: Prof John Gatsi

  • Renewed leadership spearheads ‘sprinter-pace’ reform agenda at Energy Commission

    Renewed leadership spearheads ‘sprinter-pace’ reform agenda at Energy Commission

    By Adnan Adams Mohammed

    The Energy Commission of Ghana is entering a high-velocity phase of restructuring and expansion, as the new leadership team, led by Board Chairman Prof. John Gatsi and Acting Executive Secretary Adwoa Serwaa Bondzie, unveils a “sprinter-pace” transformational agenda.

    The ambitious roadmap aims to restore public confidence, overhaul corporate governance, and significantly increase the Commission’s physical and regulatory footprint across the country.

    Rapid regional expansion

    In a bid to decentralize operations and improve accessibility, the Commission has announced a blitz of new office openings. Prof. Gatsi assured stakeholders that the Ho office in the Volta Region will be officially commissioned by next month.

    Following closely, four additional regional offices are slated to become operational before the end of March 2026: These are at Wa (Upper West Region); Damongo (Savanna Region);Kumasi (Ashanti Region); and Takoradi (Western Region)

    Future-proofing Ghana’s energy sector

    Under the new leadership, the Commission is pivoting toward the future of global energy. A primary focus of the mandate includes:

    Electric Vehicles (EVs): Envisaging a surge in green transport, the Commission plans to regulate and rapidly expand EV charging stations nationwide to make electric vehicle usage more convenient for Ghanaians.

    Renewable Energy: Strengthening the regulatory framework to integrate more sustainable power sources into the national grid.

    Port Monitoring: Enhancing enforcement at the nation’s ports to ensure only standard, high-quality electrical wiring and appliances enter the Ghanaian market.

    Fiscal discipline and revenue growth

    The “sprinter-pace” agenda is backed by a strong financial performance. Between August and December 2025, the Commission demonstrated robust management of its Internally Generated Funds (IGF).

    During this five-month period, the Commission embarked on investment which yielded substantial returns. This strategy of diversifying revenue streams is central to the Commission’s goal of becoming more self-reliant and financially resilient.

    Restoring public trust

    Beyond infrastructure and technology, the leadership is prioritizing a cultural shift. The agenda emphasizes a total restructuring of corporate governance and ethics, paired with increased public education on energy efficiency and conservation.

    By enforcing strict standards for electrical installations and appliances, the Commission aims to ensure that “Energy Efficiency” is not just a slogan, but a lived reality for Ghanaian households and businesses.

     

  • “Window” of Opportunity: Non-Interest Banking redefining Ghana’s financial strategy in the boardroom

    “Window” of Opportunity: Non-Interest Banking redefining Ghana’s financial strategy in the boardroom

    By Adnan Adams Mohammed

    In the wood-paneled boardrooms of Accra’s leading commercial banks, a new term is dominating the agenda: the “Non-Interest Window.”

    Following the Bank of Ghana’s (BoG) landmark publication of the Guideline for the Regulation and Supervision of Non-Interest Banking on January 13, 2026, the traditional banking landscape is undergoing a swift, strategic pivot.

    For existing financial institutions, this “window” represents a golden ticket. Unlike new entrants who must face the rigors of fresh licensing, conventional banks can leverage their existing infrastructure to roll out non-interest products.

    The race is now on to see who can claim the first-mover advantage in a sector that global investors are watching with bated breath.

    Strategy Meets Execution

    The industry’s reaction has been near-instantaneous. At least five major conventional banks have already integrated non-interest banking into their 2026 strategic plans. Some have gone a step further, with board subcommittees embarking on international “study tours” to successful hubs of non-interest finance in order to refine their business models before a formal first quarter (Q1) application.

    The Capacity Building Boom

    The shift is not just happening at the executive level; it is transforming the professional requirements of the Ghanaian banker. Organizations such as the Chartered Institute of Bankers (CIB) and the Association of Certified Chartered Economists (ACCE) have already launched certification programs.

    “We are witnessing a re-engineering of capacity building,” notes Prof. John Gatsi, the,Advisor on Non-Interest Banking & Finance at the BoG. According to Gatsi, this policy shift is about more than just a new product, it’s about real financial sector inclusion and diversifying the very nature of banking jobs in the country.

    A New Environment for Banking

    At the conclusion of the 128th Monetary Policy Committee (MPC) meeting in late January, the Governor of the Bank of Ghana, Dr. Johnson Asiama, was notably upbeat. While the committee made headlines by cutting the policy rate to 15.5%, the Governor highlighted that the new non-interest guidelines are creating a “new environment” for the industry.

    By allowing conventional banks to operate these windows, the BoG is essentially broadening the financial intermediation channels available to Ghanaians. This diversification is expected to cushion the industry against market volatility while offering ethical and inclusive options for a broader segment of the population.

    As the first quarter of 2026 unfolds, the “window” is no longer just a regulatory concept it is the frontline of Ghana’s banking evolution.

     

     

  • The Staff Mirror of Energy Commission 

    The Staff Mirror of Energy Commission 

    By Mavis Adams

    Impression picked among staff and management indicate trust in the performance of the board so far chaired by Prof. John Gatsi.

    In corporate governance active boards who are conscious about their mandate to take policy decisions and supervise activities of the organization tend to benefit all in the organization.

    Though the complexities surrounding state institutions are different from private institutions and state companies, the board has shown remarkable foresight and determination at regulatory and policy reforms, fair labor practices and welfare , adherence to core mandate with innovation as well as regional expansion to drum home, for example energy efficiency regulatory benefits to all parts of Ghana with strategic focus on five regions of which the first of the five starts in February 2026.

     

    Since mid August 2025 when the board came to Office, there has been improvement in licensing effectiveness, stakeholder engagements which is an important part of regulatory management and improvement in financial and audit oversight.

    A new board secretary, internal auditor , head of human resource and head of public affairs have joined the management team to deliver the best for the Commission . In addition , a new chief inspector as provided for by the Energy Commission Act to strengthen regulatory compliance and efficiency. A new local content and local participation coordinator has also been appointed to ensure the purpose of local content regulation is achieved for Ghanaians through effective compliance monitoring.

     

    The salary levels which have been very low have started seeing improvements with commensurate staff commitment. Outstanding labour related issues have been dealt with and the regulatory environment is more strengthened. The commission has issued notices to the public about the regulations of Electric Vehicle Charging stations.

    The Commission, this is told may issue a new directive guide senior management including directors and board members as to when it is allowed for these categories of persons to take up appointments and board membership of entities once regulated through a cooling off provision.

     

    The challenge at the port is receiving the attention that it deserves and there will be a significant improvements soon.

    The staff and management have been concerned about the continuous stay in office by the executive secretary who attained 60years in October 2025. Her continuous stay is working against reforms and fair labour practices. Some energy sector Think Tanks have started gathering information about the development.Staff also want the board to direct investigations to be conducted into payroll and human resource

  • BoG at final stage of non-interest banking framework draft …To be laid soon for approval

    BoG at final stage of non-interest banking framework draft …To be laid soon for approval

    As the Bank of Ghana (BoG) prepares to lay a comprehensive framework in parliament soon for the introduction of Non-Interest Banking and Finance to expand financial inclusion, it assures that it will do so within a regulatory model that avoids overt religious affiliation and maintains equal access for all citizens.

    This is to help preserve the nation’s secular identity and promote market neutrality across the financial system.

    Giving some insights on the operational modalities, the advisor to the Governor, Professor John Gatsi, noted that the capital requirements for establishing non-interest banks in Ghana will strictly follow the central bank’s existing prudential and regulatory standards and would have to be fully incorporated in Ghana and have their capital sources thoroughly verified under the Bank of Ghana’s regulatory oversight.

    “The rules are very clear. If you want to set up a bank in Ghana, you must incorporate and subject your capital to scrutiny whether local or foreign to ensure it comes from an acceptable and transparent source. These measures are already embedded in Act 930, and we’re not reinventing them,” Prof. Gatsi said.

    Speaking during a Thought Leadership Webinar on Non-Interest Banking and Finance organised by the Chartered Institute of Bankers, Ghana, he stressed that transparency and regulatory compliance are key to building public trust and stability in the new system.

    According to the central bank, the regulatory guidelines for non-interest banking are complete and currently undergoing internal validation after extensive stakeholder consultations with both Muslim and non-Muslim communities to ensure a shared national understanding of the framework.

    The NIBF regime, when operationalised will issue two types of licenses: one for conventional banks seeking to offer non-interest banking products through a dedicated window, and another for fully-fledged non-interest banks whose operations are entirely based on interest-free principles.

    “The framework is being developed in a secular context,” Prof. Gatsi clarified. “We are not expecting fully fledged non-interest banks to have names associated with any religion. The goal is to ensure sanity, inclusion, and progress within the industry.”

    He further revealed ongoing collaboration between the BoG, the Securities and Exchange Commission (SEC), and the National Insurance Commission (NIC) to harmonise regulations governing Sukuk (Islamic bonds) and Takaful (non-interest insurance) as key components of the broader non-interest financial ecosystem.

    “We have brought together these regulatory bodies to form a joint committee,” he noted. “By the time the BoG finalises its guidelines, the SEC and NIC will also have completed theirs to facilitate full capital market participation and alternative funding sources for national development.”

    The Advisor also announced that the BoG will host a capacity development programme on December 1, 2025, for banks, insurance firms, and capital market players.

    The training will focus on Sukuk issuance, product development, and non-interest insurance mechanisms.

    He emphasised that Ghana’s transition to non-interest banking is not experimental but based on proven global models from countries such as Nigeria, Malaysia, Kenya, and South Africa.

    “A governance structure will ensure that all non-interest products align with ethical finance principles, supported by a central oversight mechanism at the Bank of Ghana,” Prof. Gatsi added.

    At the outset, non-interest banking will be limited in scope – excluding microfinance institutions, rural banks and community banks.

    According to him, the central bank’s intention is to “start well, have control and manage before escalating”.

    This phased strategy, he explained, will help the regulator identify implementation challenges early, strengthen compliance systems and build institutional capacity before the framework is expanded to the financial sector’s other segments.

    The regulatory foundation for this initiative draws from Act 930, the Banks and Specialised Deposit-Taking Institutions Act, 2016, which already provides for key prudential standards including anti-money laundering (AML) provisions, liquidity management and sources of capital.

    These statutory provisions will remain fully applicable to non-interest banks, ensuring consistency with the broader financial system.

    Additionally, liquidity management for non-interest institutions will be guided by asset-backed structures and risk-sharing models rather than conventional interest-based instruments but will still meet the same prudential benchmarks.

    Under BoG’s proposed structure, the regulator plans to issue two distinct licences. The first will allow conventional banks to operate non-interest ‘windows’, enabling them to offer non-interest financial products alongside traditional services. The second will be for full-fledged non-interest banks, which will operate entirely within the non-interest framework.

    These measures, Prof. Gatsi said, are intended to foster competition and innovation while preventing market fragmentation.

    A two-tier governance model will be applied for the new system. Each institution will have its own internal governance committee responsible for vetting non-interest products, while a central oversight body at BoG will validate compliance with ethical and prudential standards. “Governance is at the heart of non-interest banking,” he noted.

    Globally, the non-interest finance industry continues to expand. According to Standard Chartered, Islamic finance assets surpassed US$5trillion in 2024 and are projected to reach US$7.5trillion by 2028. The global Sukuk market alone is expected to grow from US$1.08trillion in 2024 to US$1.295trillion in 2025, on rising investor appetite for ethical, asset-backed financial instruments.

     

    By Adnan Adams Mohammed

  • Non-interest banking is not a competitor to conventional banking – Prof Gatsi 

    Prof. John Gatsi

     

     

     

    By Adnan Adams Mohammed

     

    A finance expert and an Advisor to the Bank of Ghana has jolted a misconception and misinformation spreading across the country that non-interest banking, or as others call it Islamic banking, if introduced in Ghana will collapse the conventional banks.

     

    The expert emphasised that, rather non-interest banking will achieve economies of scope, financial inclusion, diversification in financing trade and commerce, as well as project finance for government and the private sectors of the economy.

     

    Currently, among the West African countries, only Ghana is not implementing the non-interest banking and finance systems, which has really hurt Ghana’s economy in many ways. According to the World Bank, the Islamic finance industry has expanded rapidly over the past decade, growing at 10-12% annually. Today, Sharia-compliant financial assets are estimated at roughly US$2 trillion, covering bank and non-bank financial institutions, capital markets, money markets and insurance (“Takaful”). It is in line of these development that, the current government has shown commitment to rollout Islamic finance in Ghana.

     

    “The apprehension that Islamic finance and banking will negatively affect conventional banks in the country is not rooted in progressive information widely available to regulators globally”, Professor John Gatsi has said in an interview last week.

     

    “Furthermore, non-interest banking and finance will provide unique support to women entrepreneurs and contribute to achieving the Sustainable Development Goals.”

     

    Many experts have asserted that, non-interest banking and finance will enhance Ghana’s market economic structure.

     

    The non-interest finance system is not designed to outperform conventional structures because it is not a competitor but plays crucial complementary roles in municipal, central government, and private sectors’ infrastructure and enterprise funding.

     

    “We have non-interest banking (Islamic banks )and capital markets institutions, including fintech companies in the UK, Saudi Arabia, Dubai, Turkey, Japan, Canada, France, Netherlands, Nigeria, Uganda, Hong Kong, Singapore, Luxembourg, America, Malaysia, to name a few. However, these institutions have not even competed with conventional banks, let alone dismantled them.”

     

  • Another banking sector cleanup in the offing – Experts alarm

    Another banking sector cleanup in the offing – Experts alarm

    Adnan Adams Mohammed

    Financial industry experts have alarmed of imminent cleanup exercise as the country is witnessed a debt restructuring program.

    This comes as the local economy is yet to recover from the first ever financial sector cleanup exercise initiated in 2019.

    The experts explained that, Debt Exchange Program the debt-ridden country is to undertake will usher Ghanaians into unprecedented hardship likened to the era of 1979-83 hardship in Ghana. A former Executive Director at Standard Chartered has indicated that, the debt restructuring will result in sequence of events that will end with many borrowers defaulting their loans or funds borrowed. This will affect many financial institutions.

    “Many will be borrowing funds which they won’t be paying back (so let us say they will be given grants, but lenders don’t know this yet)”, Alex Mould intuited in an interview last week.

    “He itemised the expected economic situations due to the debt restructuring program as that: in this year, there will be less spending power, little or no savings; companies will borrow less and less production due to less demand (only essentials like food staples); Many businesses will fold and eventually lay off workers; Most contracts will not be honored; and Many rentals will be unoccupied. This will lead to low Gross Domestic Product (GDP) growth.”  

    To this, the Dean of University of Cape Coast School of Business, Prof. John Gatsi warned that the country will experience another round of banking sector cleanup if care is not taken.

    According to the economist, the “Debt exchange program is default announcement and a call for support to resolve debt servicing burden by government.” but was quick to add that “This does not in anyway take away the solemn and legal commitment to pay principal at maturity and also pay periodic coupon to the bond holders.”

    Implicitly, this legal obligation or covenant is such that the debtor (government of Ghana) is still a debtor whether there is cash flow / revenue challenges or not.

    In the financial terms, the fact that government has declared default does not mean government has triggered a different status for itself. Government is still a debtor.

    Prof Gatsi emphasizing on this aspect expunged that, “The Ministry of Finance is not a court to determine that individual bond holders will not get favorable judgment in any legal action especially when the process was described as voluntary.”

    “In a democracy, individuals bond holders are at liberty to go to court. The court has the choice to determine whether or not people should be scared about government and her debt instruments going forward. Government indeed needs the support of bond holders in the debt exchange program but the critical question is whether government should determine what it wants and not a negotiated deal.”

    Consequently, the Economics Professor cum Lawyer juxtaposed that, the debt restructuring will lead to liquidity challenge in the financial sector of the economy.

    “The challenge now is that government debt restructuring in a high interest rate regime, may trigger a certain percentage of default by private sector debtors such as households, micro, small and medium size enterprises . So we await a boom in the non- performing loan portfolio of banks soon with reclassification of assets with huge assets expected for impairment. This will create liquidity and capital challenges. We are in for another round of bank sector cleanup if care is not taken”, he added.

    “The debt exchange must be negotiated fairly for bond holders to accept the difficulties government is facing to share part of the burden with government. If this is not done then the entire process becomes hostile . The exercise should be fair to the financial system in general to foster a negotiated debt exchange program and this will keep bond holders still trusting government. Everything must be done to maintain investor confidence to achieve trustworthy and credit worthiness of government instruments along the long term path.”

    Meanwhile, the Finance Minister, Ken Ofori-Atta has noted in the ‘Invitation to Exchange’ to individual bondholders that, the principals of eligible individual bondholders will not be touched in the debt exchange programme but the interests will get a haircut.

    This invitation is to exchange certain domestic notes and bonds of the Republic of Ghana, E.S.L.A. Plc, and Daakye Trust Plc (collectively, the “Eligible Bonds”) for new bonds of the Republic of Ghana.

    The exchange, the minister noted, will rather involve an exchange for new government of Ghana bonds with a coupon that steps up to rates ranging from 9.15% to 10.65% (depending on the specific series of new bonds) as soon as 2025 and longer average maturity.

    The minister said the domestic debt exchange is part of a more comprehensive programme to restore debt and financial sustainability.

    In the Amended and Restated Exchange Memorandum to individual bondholders, he noted: “The successful completion of this domestic debt exchange is a critical component of both the debt reduction programme and the International Monetary Fund programme discussions; it will contribute to unlocking the support of the international community and will allow Ghana to reach debt targets agreed with the IMF”.

    “We need the full participation of all bondholders in this transaction. Anything less will not make us eligible for assistance. There can be no exception”, he added.

    Apart from that, he said contingency plans have been prepared with applicable regulators to assist certain sectors of the economy (including the financial sector) after its participation in the exchange, to minimise negative spill-overs and safeguard the domestic economy including the establishment of a financial stability fund to provide a backstop for liquidity.

    The minister indicated that, the alternative to the debt exchange would be a far worse economic crisis, with protracted closure from international markets including imported goods and services and further domestic economic instability both for the real economy and the financial sector.

    “It would also mean depleted fiscal resources to support the neediest.”

    “We are acutely aware of the upfront cost of this transaction, and other aspects of our adjustment programme, to participating holders. To that end we are carving out from this exchange treasury bills (up to one-year maturity) typically held by retail investors”, he explained.

    “Further, there is also a positive trade-off for debtholders as a group: this transaction, though resulting in reduced coupon payments from 2023, will make a positive contribution to a safer and brighter future for all Ghanaians”, he argued.

  • IMF Discussion: Govt’s fear is data reconciliation and disclosure – Economist

    IMF Discussion: Govt’s fear is data reconciliation and disclosure – Economist

    Adnan Adams Mohammed

    As Ghana has begun a crucial discussion with the International Monetary Fund (IMF) for debt management and policy credibility, an economist has intuited that, many government officials fear the aspect of data reconciliation and disclosures.

    The renowned economist with University of Cape Coast (UCC) urged government not to give in to the negative attitude of some fear government officials who fear the reconciliation and full disclosure of data, especially on procurement, and therefore advocating against the IMF program.

    Government of Ghana started IMF Program Discussion, last week, seeking ‘a balance of payment support’ as part of a broader effort to quicken Ghana’s build back in the face of challenges induced by the Covid-19 pandemic and, recently, the Russia Ukraine crises.

    But, speaking to an Accra based radio station, Top Fm, last week when the economist was asked about what could be some details about the IMF discussion with the government, he said, there will be economic and financial data reconciliation and full disclosures with the involvement of the Ghana Statistical Service, Ghana Revenue Authority and Bank of Ghana.

    “Given the pronouncement by some key government officials in the past, it suggests that not all of them may like the decision, especially when disclosures will be required on many issues”, Prof John Gatsi, Dean of the Department of Finance at UCC, posited when asked about how he sees the commitment and unity of purpose of government officials towards IMF program. “Data credibility and transparency will be the starting point  of the formal  discussion with the IMF.”

    He added that starting an engagement with the IMF  and discontinue can signal  more doubt about economic management leadership and package the economy as risky to associate with.

    He said  any divided commitment to the discussion will isolate Ghana as confidence and policy credibility  will diminish further.  

    As he indicated that a lot may unfold this week as there is no prior engagement with stakeholders before the announcement, it is difficult to conclude whether or not the purpose of going to the IMF is in line with the real problem.  

    Prof. Gatsi explained that the problem of the Ghanaian economy is more of debt distress with contagion effect hence debt restructuring maybe what is needed but the outcome of the engagement with the IMF team will conclude on that.

  • COVID Blame-Game And Mismanagement: Makes Ghana a candidate for an IMF program

    COVID Blame-Game And Mismanagement: Makes Ghana a candidate for an IMF program

    By: Prof. John Gatsi

    Generally, countries opt for an IMF program when the economy is under economic and financial distress with the aim of  achieving stability.

    The pandemic provided Ghana with opportunities and challenges. There has been expanded expenditure but also quicker access to resources.  Weak prioritization of  the use of abundant  supply of funds created huge fiscal gap . Election related expenditure , travel expenses and National cathedral expenses did not indicate the country was really in distress.  Unexplained  high borrowing beyond unsustainable levels , entangled the inbuilt resilience of the economy as interest payment burden undermine fiscal prudence. Policy credibility and confidence have been compromised and mutilated .

    In 2001, NPP government engaged the IMF for the HIPC Initiative , inherited and extended an IMF program from 2017 to 2019.  In 2022  an NPP government has officially requested for an IMF program  for the restoration of policy credibility and confidence .

    In terms of expenditure and funds related to Covid-19 , Ghana experienced positive net benefits as the funds raised were more  than the expenditure incurred.   So if the fresh  and ongoing engagement with the IMF is pandemic induced, then it is  pandemic mismanagement.

    The intention of government to engage the IMF is to stabilize the economy and  learn some basic lessons of prudence and productive expenditure.

    All the statements made against going to IMF including  only lazy governments go to the IMF and the global economy is in distress cannot change the fact that Ghana has opted for an IMF program.

    Though we have global economic challenges , not all countries are going to the IMF due to the pandemic and Russia- Ukraine war. If you are going to the IMF it must be related to the way the pandemic has been managed. Global economic developments are always contributors to economic instabilities that direct countries to the IMF , be it international crude breakdowns, droughts,global financial meltdown, global commodity price collapse etc.

  • Using monetary policy to control inflation: Economists look elsewhere for solution

    Using monetary policy to control inflation: Economists look elsewhere for solution

    Adnan Adams Mohammed

    Two renowned economists from the country’s leading universities have all flagged down the potency of using the monetary policies to control the recent leapfrogging inflation rate.

    They believe the Bank of Ghana’s measures put in place to curb the consistent rise in inflation are either not working or the situation is not being diagnosed properly. Both, are thereby calling on the government through the finance ministry to consider other factors such as the fiscal space.

    The Ghana Statistical Service last week announced that, increment in transport fares and unbearable food prices pushed  May inflation rate to 27.6%. This is against 23.6% recorded in April which was about 4% jump from March inflation of 19.4%. The inflationary trend pushed the Monetary Policy Committee (MPC) of the BoG to tighten the policy rate by 200 basis points from 17% in April to 19% in May. Yet, the according to Professor of Finance and Economics at University of Ghana, the monetary policy has proven to be inefficient and has therefore asked the government to adopt a fiscal policy approach toward mitigating inflation in the country.

    “If you look at the disparity between the inflation and the policy rate and the Treasury bill rate, it tells you there’s a lot more work to be done and we cannot look to the monetary policy because the problem is from the fiscal side”, Prof. Godfred Alufar Bokpin of the UG Business School. “The monetary policy is constrained in terms of how we can deploy that effectively to contain inflation and engineer growth.”

    Also, an economist at the University of Cape Coast has opined that the Central Bank maybe misdiagnosing the problem. He said, the increase in the BoG policy rate by 200 basis points to 19% is in response to risk to the economy; high inflation, weak financial inter-mediation and fiscal stress, which is expected to trigger lending rate hike.

    “The measures taken in an environment of volatile depreciation promises rather further inflation”, Professor John Gatsi, Dean of School of Business and Finance at UCC said in reaction to the MPC’s announcement, last week. “High inflation and upward lending rate will undermine government contracts execution and create new levels of arears due to cost implications for procurement of materials.”

    Prof Gatsi expatiated that, a number of projects maybe abandoned due to inflation, depreciation and cost of borrowing and warned that there maybe too much pressure on the banks as cost of mobilizing funds continue to increase with the possibility of distorted returns on placement of funds with the banks.

    According to the Government Statistician, Professor Kobina Annim, the rate of inflation for Transport (39.0%), Household Equipment and Maintenance (33.8%), Housing, Water, Gas and Electricity (32.3%) and Food and Non-Alcoholic Beverages (30.1.6%) were higher than the national average (27.6%).

    In May, 2022, 12 of the 13 divisions recorded inflation rates higher than the rolling average from June, 2021 to May, 2022.

    The data showed that Food inflation in May, 2022 was 30.1%, compared with 26.6% in April 2022. Non-food Inflation was however 25.7% in May, 2022, as against 21.3% the previous month.

    Meanwhile, Prof Bopkin has posited that, we cannot look to monetary policy to tackle this.

    “We must shift our attention to the fiscal side so that the fiscal side will respond appropriately with the discipline that it requires,” he stressed.

    “Once the source of the inflation is largely fiscal, then there’s a limit to how far you can deploy the monetary policy to bring down inflation and then engineer growth.

    “More so, because of the monetary policy framework that we are using under inflation targeting, because for one key requirement for inflation targeting to be effective, it is fiscal discipline. Once you deny the monetary side the fiscal discipline, then there’s no way they can use the monetary policy effectively to bring down inflation and engineer growth.

    At a press briefing, fortnight ago, the central bank said the growth prospects in the domestic economy remain positive and the Bank’s high-frequency indicators point to continued and increased momentum in economic activities with private sector credit showing some improvement in real terms, despite the increased price pressures.

    “All these are resulting in a closure of the negative output gap. The banking sector remains robust, with sustained growth in total assets, investments and deposits. However, business and consumer confidence have dipped, reflecting the sharp depreciation of the currency and the general high inflationary environment, which has resulted in higher input costs for businesses. A quick turnaround, with more confidence-building measures to counter these conditions, would provide further boost to the real economy”, it added.

    On fiscal policy implementation, the Committee observed that execution of the budget for the first quarter was broadly in line with targets although there was a minor deviation in the deficit target, stemming largely from low revenue receipts.

    It is the expectation of the Committee that fiscal consolidation will take hold gradually and the mid-year budget review will provide further fiscal fine-tuning to ensure that the fiscal consolidation efforts stay on track.

    The MPC said despite the improvement in the trade balance due to favourable commodity prices, the external sector has weakened somewhat due to developments in the capital and financial account.

  • Legal positivism, judicial decisions and fiscal policy implications: the 30th November, 2021 approval of the 2022 budget 

    Legal positivism, judicial decisions and fiscal policy implications: the 30th November, 2021 approval of the 2022 budget 

    By: Prof. John Gatsi

    There exist plethora of legal research findings indicating that judicial decisions are dominantly influenced by legal positivism paradigm or jurisprudential school of thought. A judge or the judiciary is at the heart of enforcing and applying  the law , therefore, the judge ‘s jurisprudential leaning is very important in deciding on a case.

    It was Montesquieu who eloquently explained that a judge or judicial panel is “the mouth of the law and the judge’s only role is to apply the law”. In the corridors of positivism, the written law is complete and comprehensive and does not need any external assistance such as historical, moral nor sociological developments to deliver justice. The positivists jurists believe in applying the written law as it is the purest form of justice. In this paradigm, the judge is variously described as mechanical, strict user of the law and a prisoner of the law to achieve the so called legal certainty .  Irrespective of the jurisprudential school of thought, Constitutional experts describe the Supreme Court as the court of policy . Meaning judicial decisions may reflect policy orientation of judges.

    If laws are made to correct history, to address social and human development, then legal realism should be the friend of justice. In many cases where the dogma of positivism influence public interest, political and developmental issues, the public reacts negatively to judicial decisions because the justice  thought to have been served may create instability or the matter being addressed, was not addressed satisfactorily per public assessment.

    Sometimes positivism produces judicial decisions  that negatively affect private investments by citizens and foreigners creating risky investment environment with long lasting painful investor experiences. In the  Exton Cubic case for example Article 268 of the 1992 Constitution was interpreted as though , it is the private investor who is expected to seek for parliamentary approval of the grant of mineral concessions. When this should have been the duty of the institution and ministry involved. If that is the case , then citizens can go to court to seek interpretation that per Article 174 Parliament did not approve the request to discontinue collection of fees at the various toll both before it was applied. It also means citizens can seek the interpretation of the court to the effect that the petroleum revenue management law does not allow the use of petroleum revenue in payment of fees but to physical infrastructure in education. Also , per article 181 of the Constitution and section 56 of the public financial management Act, prior approval must be received before issuing bonds to ensure those transactions are declared null and void.

    The judgment regarding the issue of whether or not a deputy speaker  of parliament presiding can vote, the Supreme Court Justices concluded that the 138 members on the majority side including deputy speaker presiding  who voted to approve the 2022 budget was valid.  The implication is that the E-levy was passed on 30th November 2021. It also means the 2022 budget was fully approved. Thus,  all the division, parliamentary disunity and possible erosion of cooperation is not the concern of the positivists.  The law  must be interpreted to throw its light of peace, stability and tentacles to shape public policy.  The fathers of separation of powers  preached independence of the organs of government to ensure  congruence of effort in the interest of the state.  The public cannot see unity among the organs of government. There is bruised relationship created between parliament and the judiciary given the comments attributed to parliamentarians. Now there is no need for consensus building in parliament and consultations with the public because because the public may consider the development unfortunate The cost of the atmosphere created by this decision , is much more than the  short term fiscal benefits. Winner takes all will return to parliament if a party wins majority with its negative outcomes. At another time l will deal with the implications and concerns if majority of rulings of the courts reflect policy orientation of the government or the opposition.  I do not intend to question why in the 2020 election petition, the Supreme Court stated the EC is an independent institution so cannot intervene. The citation of the constitutional authority to interpretation granted to the apex court is not meant to easily interfere with the almost 30years of self regulation without establishing stringent conditions that must exist to allow the judiciary to take steps to resolve challenges that parliament cannot ordinarily resolve .

    Positivists ayeeko . Legal realism we love to see your work in matters that have effects on policy.