Brief Historical Background
The Central Bank of Ghana traces its roots to the Bank of the Gold Coast (BCG), where it was nurtured. As soon as local politicians and economists saw political independence in sight in the mid 1950’s the agitation for a central bank was revived. It was argued that a central bank was one institution which would give true meaning to political independence. It may be recalled that way back in 1947 some leading politicians had called for the establishment of a national bank with central bank functions to act as banker to government and to cater for the indigenous sector of the economy.
Proposals of the advocates for a central bank were accepted and in early 1955 another Select Committee was set up by the Government to take a new look at the Trevor Report and prepare the grounds for the establishment of a central bank in Ghana. Fortunately, the BGC had already set the stage for central banking: all that was needed was specially trained personnel in central banking and suitable accommodation for the bank to take off. By the end of 1956, all was set for the establishment of the Bank of Ghana. A new and modern five-storey building had been put up on the High Street, adjacent to the Accra Metropolitan Assembly (AMA) to house both the Bank of Ghana and the Ghana Commercial Bank (GCB).
The Establishment of Bank of Ghana, 1957
On the 4th March 1957, just two days before the declaration of political independence, the Bank of Ghana was formally established by the Bank of Ghana Ordinance (No. 34) of 1957, passed by the British Parliament. Frantic preparations then began to put in place an organisational structure for the new central bank. By the middle of July 1957, all was set for the official commissioning of the new Head Office of the Bank on the High Street.
In his opening address at the end of July 1957, the then Leader of Government Business (Prime Minister) stated with pleasure that the occasion marked the beginning of independent monetary administration in the newly independent Ghana – a cherished dream had at long last become a reality. The Leader of Government Business had put the aspiration of the country in establishing the central bank as follows: “In the modern world a central bank plays a very important and decisive role in the life of a country. It is essential to our own independence that we have a government-owned bank and that the central bank follows a policy designed to secure our economic independence and to further the general development of our country.”
The principal objects of the new central bank, as enshrined in the 1957 Ordinance, were “to issue and redeem bank notes and coins: to keep and use reserves and to influence the credit situation with a view to maintaining monetary stability in Ghana and the external value of the Ghana pound; and to act as banker and financial adviser to the Government.
The opening ceremony paved the way for the Bank to commence formal banking operations on 1st August 1957, when the Banking Department opened for business. The Issue Department did not commence operations until July 1958.
The Bank of Ghana has since 1957 undergone various legislative changes. The Bank of Ghana Ordinance (No.34) of 1957 was repealed by the Bank of Ghana Act (1963), Act 182. This Act was subsequently amended by the Bank of Ghana (Amendment Act) 1965, (Act 282). The Bank of Ghana Law, 1992 PNDCL 291 repealed Acts 182 and 282.
The current law under which the Bank operates is the Bank of Ghana Act, 2002 (Act 612).
Corporate Profile
The first Governor of the Bank was Mr. Alfred Eggleston, the former Managing Director of BGC and an accomplished Scottish banker on secondment to Ghana from the Imperial Bank of India. His Deputy Governor was one
Mr. Douglas F. Stone, another renowned British central banker also on secondment from the Bank of England.
The general administration of the Bank was entrusted in the hands of a seven-member board of directors under the Chairmanship of the Governor.
The first Board was as follows:
- 1. Alfred Eggleston Chairman
- 2. Douglas F. Stone Deputy Governor
- 3. R. S. Blay Director
- 4. Dr. N. T. Clerk Director
- 5. C. E. Osei Director
- 6. R. C. Parkin Director
The Governor of the Bank and his Deputy were appointed by the Governor of the Gold Coast on the recommendation of the Prime Minister, in accordance with Section 10(1) of the 1957 Ordinance.
The Governor and his Deputy were each appointed for a term of five years and were eligible for reappointment. Those two officials were answerable to the Board for their acts and decisions in the course of the general administration of the affairs of the Bank.
The Board itself was also answerable to the Ministry of Finance for efficient management of the Bank. The other directors of the Board were also appointed by the Prime Minister with the approval of the Governor of the Gold Coast for a term of three years, subject to renewal.
The Bank commenced business with six main departments namely:
1. The Governor’s Office
2. The Administration/Personnel Department
3. The Banking Department
4. The Issue Department
5. Accounts/Audit Department
6. Economics/Statistics Department
The Governor’s Office was headed by the Secretary to the Board while the other departments were headed by Managers who reported directly to the Deputy Governor or, in special cases to the Governor. The departments were run by the managers in accordance with policies and decisions arrived at by an in-house Management accordance with policies arrived at by an in-house Management Committee comprising the Governor, the Deputy Governor and three or four heads of the department appointed by the Governor.
With that initial organisational arrangements, the Bank of Ghana assumed its central role in the banking system of Ghana, which then comprised the central bank, two expatriate commercial banks – the British Bank of West Africa (BBWA) (now Standard Chartered Bank) and Barclays Bank Limited (Dominion, Colonial and Overseas); and the new Ghana Commercial Bank (GCB).
There was also the Post Office Savings Bank (POSB), which was, in fact, not a bank by definition; it was only an institution set up by the government to mobilise public savings through the agency of the numerous post offices in the country, for investment in government paper.
Relations with the other banks in the system were set out under sections 39 – 42 of the 1957 Ordinance. Initially, the relationship was not very strong. The Central Bank was to act as a banker to other banks and cooperate with them to promote and maintain adequate and reasonable banking services for the public. It was also to ensure high standards of conduct and management in the banking system.
The Bank was also given powers to require the banks to maintain a proportion of their assets in a specified form and to submit monthly returns on their operation to the Central Bank. It must be noted, however, that banking supervision or bank examination was not specifically highlighted in the ordinance in the Ordinance.
In conclusion, it may be said that the establishment of the Bank of Ghana on 4th March 1957 was indeed a significant landmark in the history of the financial system in Ghana. It boosted public morale and raised further the aspirations of many countrymen even two days before Ghana attained independence on 6th March 1957. The lists of all boards of directors and deputy governors are provided in appendices I and II.
The general administration of the Bank was entrusted in the hands of a seven-member board of directors under the Chairmanship of the Governor.
Functions of the Central Bank of Ghana
- a. formulate and implement monetary policy aimed at achieving the objects of the Bank;
- b. promote by monetary measure the stablisation of the value of the currency within and outside Ghana;
- c. institute measures which are likely to have a favourable effect on the balance of payments, the state of public finances and the general development of the national economy;
- d. regulate, supervise and direct the banking and credit system and ensure the smooth operation of the financial sector;
- e. promote, regulate and supervise payment and settlement systems;
- f. issue and redeem the currency notes and coins;
- f. ensure effective maintenance and management of Ghana’s external financial services;
- h. license, regulate, promote and supervise non-banking financial institutions;
- i. act as banker and financial adviser to the Government;
- j. promote and maintain relations with international banking and financial institutions and subject to the Constitution or any other relevant enactment, implement international monetary agreements to which Ghana is party; and
- k. do all other things that are incidental or conducive to the efficient performance of its functions under this Act and any other enactment.
Governance of the Bank
The governing body of the Bank is the Board of Directors as stipulated in the Bank of Ghana Act, 2002 (Act 612). The Board consists of the Governor, who is also the Chairman, two Deputy Governors and ten Non-Executive Directors.
The Board is appointed by the President of the Republic of Ghana, in consultation with the Council of State. The Governor and the two Deputy Governors are appointed for a term of four years and are eligible for re-appointment. The non-executive directors hold office for a period of three years and are also eligible for re-appointment.
The Board is responsible for formulating policies necessary for the achievement of the Bank’s objectives which are:
To maintain stability in the general level of prices;
To ensure effective and efficient operations of the banking and credit systems and support general economic growth.
Membership of the Board
The membership of the Bank of Ghana Board of Directors as of April 2023 is as follows:
- 1. Dr. Ernest Addison
- 2. Dr. Maxwell Opoku-Afari
- 3. Mrs. Elsie Addo Awadzi
- 4. Dr. Samuel Nii-Noi Ashong
- 5. Mr. Joseph B. Alhassan
- 6. Dr. Kwame Owusu-Nyantekyi
- 7. Mr. Andrew Adinorte Boye-Doe
- 8. Mrs. Comfort F. Ocran
- 9. Mr. Jude Kofi Bucknor
- 10. Ms. Angela Kyerematen-Jimoh
- 11. Dr. Regina Ohene-Darko Adutwum
- 12. Prof. Eric Osei-Assibey
- – Governor (Chairman)
- – 1st Deputy Governor
- – 2nd Deputy Governor
- – External Director
- – External Director
- – External Director
- – External Director
- – External Director
- – External Director
- – External Director
- – External Director
- – External Director
Ms. Sandra Thompson, Head of the Secretary’s Department is the Secretary to the Board.
Committees of the Board
The various Committees of the Board of the Bank of Ghana are currently constituted as follows:
- Audit Committee
- * Audit
- * Human Resource, Corporate Governance and Legal
- * Economy and Research
- * Strategic Planning and Budget
* Cyber and Information Security Committee
* Risk Committee
The Committee’s primary roles include ensuring that appropriate and adequate accounting procedures and controls are established, as well as supervising compliance with operational, statutory and international standards.
- Human Resource, Corporate Governance and Legal Committee
The Committee formulates policies relating to the human resource management function of the Bank and assesses their effectiveness so as to make necessary reviews when necessary. The Committee also formulates policies on governance issues; mainly regulations, supervision, processes and operations to ensure compliance with best practices and standards.
- Economy and Research Committee
The Committee is responsible for considering and making policy recommendations on economic, banking and financial issues relating to the Bank’s functions and the economy as a whole. It collaborates with the Research Department on research activities to enhance the quality of information provided to the Board and the public.
- Strategic Planning and Budget Committee
The Committee formulates and directs the Bank’s strategic policies in the fulfillment of its objectives. It collaborates with the Finance Department in ensuring that the Bank’s Budget is prepared and approved on schedule.
- Cyber and Information Security Committee
The purpose of the Cyber and Information Security Committee of the Bank of Ghana Board is to enhance the Board’s understanding and ensure effective oversight of the established Cyber and Information Security Systems of the Bank.
- Risk Committee
The Committee assists the Board in fulfilling its corporate governance oversight responsibilities, with regard to the identification and management of risks facing the Bank.
Committees of the Board are aided in their work by Bank of Ghana Board Charter and Board Committee Charters.
Read Also >>> The Bank of Ghana Act
