The recently appointed advisor to the monetary policy committee of the Bank of Ghana (bog), Professor John Gartchie Gatsi, who is also dean of the University of Cape Coast Business School, is leading a team to help drive the introduction of Islamic banking in Ghana, governor of the Bank of Ghana, Dr Johnson Asiama, has announced.
Islamic banking is defined as a banking system which is in consonance with the spirit, ethos and value system of Islam and governed by the principles laid down by Islamic Shariah.
Interest-free banking is a narrow concept denoting a number of banking instruments or operations which avoid interest. Answering questions during the 124th MPC press conference in Accra on Friday, May 24, Dr Asiama stated emphatically that the Bank of Ghana has the internal capacity to handle Islamic Banking.
He said, “Professor Gatsi is purposely here to help drive this introduction. Let me say that we have internal capacity, we have some people who know what it takes and what to do. However, we need a few steps. The head of banking supervision has gone through a lot of programmes, he is very comfortable with them.
“The current banking law, which is Act 930, which we passed in 2016, provides for it. However, there were some lapses. For example, the establishment of the Sharia supervisory boards and the like. Those were not captured in Act 930, so Prof Gatsi and his team will be doing some work in that regard to ensure that we are able to operationalise Islamic financing, especially Islamic banking.
“Remember, it goes just beyond Islamic Banking, there are other aspects of financing involved. So we are working on it, hopefully very soon, when we are ready, we can consider licenses to establish an Islamic Bank.”
In other areas, Dr Johnson Asiama assured Ghanaians and the general public that they will soon see adjustments in prices of goods and services so long as there is competition.
This follows the appreciation of the Cedi against the Dollar. Asked when Ghanaians are to expect price predictions on the market following the stability of the local currency, Dr Asiama answered that “You can understand that some people stock their goods at a higher exchange rate, and so naturally, even with the appreciation, it takes a while for you to see that adjustment.
“However, rest assured that you will see the adjustment certainly so long as there is competition, so long as it is not a monopoly, and we will see that kind of phenomenon very soon.”
Asked again whether the appreciation is sustainable, he answered, “The Cedi appreciation has to be put into proper context. Much as you want to have Cedi stability in nominal terms, the important thing here is to ensure that in real terms, the Cedi is not appreciating persistently. And so the MPC went into a lot of deliberations, looked at the real movement of the exchange rate, and we think that where we are now, we don’t have that problem of real appreciation that would adversely impact our competitiveness.
“So, for now, we think that the trend is in line; we are observing it continuously, though. But the appreciation is largely driven by the markets, it is not something that the central bank is using its reserves for. If you look at the data pack we have put out, you can see that our reserve programme is growing, so we are not using our reserves to intervene in the market, therefore, the appreciation you are seeing is driven by economic policy stance of the monetary policy, by international flows. So yes, it is appreciation; however, for us, it is about maintaining exchange rate stability.”
Source: TV3