Bank of Ghana's Deputy Governors Favored to Replace Kofi Wampahby and
Successor faces high inflation and sputtering growth
Millison Narh probably first choice, UMB's Adam says
The Bank of Ghana’s two deputy governors are the most likely candidates to succeed Governor Kofi Wampah in a job that is complicated by persistently high inflation and sputtering growth.
“The easiest way to go, is to elevate one of the two deputies to replace him,” Hamza Adam, head of treasury operations at Universal Merchant Bank Ltd. in Accra, said by phone on Wednesday “The first deputy governor Millison Narh may be considered first. Apart from the government being comfortable with the person, development partners should also be comfortable with the person as well.”
Wampah, who was appointed governor in March 2013, will take early retirement at the end of this month, the central bank said on Tuesday. His term was due to run out on Aug. 5.
Wampah’s successor will have to fight an inflation rate that surged to 19 percent in January, the highest in at least five years, while economic growth in the world’s second-largest cocoa producer is languishing near the slowest pace in 20 years. The Bank of Ghana has increased its benchmark rate by four percentage points since July to help restrain price growth and stem losses in the cedi, which weakened 17 percent against the dollar since the start of last year.
Second Deputy Governor Abdul Nashiru Issahaku, who was appointed at the same time as Narh in July 2013, could also be nominated, Adam said. Alhassan Andani, managing director of Stanbic Bank Ghana Ltd, who was considered for the post of governor alongside Wampah in 2013, is a possible external candidate, he said.
“We expect the president to appoint someone who will largely follow the monetary policy stance that had been set by Wampah,” Celeste Fauconnier, Nema Ramkhelawan-Bhana and Neville Mandimika, analysts at FirstRand Ltd.’s Rand Merchant Bank unit in Johannesburg, said in an e-mailed note to clients. “From this perspective it is likely that either of the two current deputies would be named as successor.”
Government income in Ghana, an oil supplier since 2010, was hit by global slump in crude prices, while rising public spending has prompted credit downgrades. The west African nation has pledged to curb its fiscal deficit as part of an agreement to receive almost $1 billion in loans from the International Monetary Fund.
Ghana needs a new face to head the central bank as the presidential and parliamentary elections, which could take place as early as Nov. 7, nears, according to Collins Appiah, chief economist at Accra-based Accent Financial Services.
Wampah’s “directive on exchange rules and inflation targeting which led to increased policy rates didn’t help the economy, a new governor will bring a breath of fresh air,” Appiah said by phone on Wednesday. A new governor must be appointed “as soon as possible to curb speculation and encourage predictability.”
The cedi gained 0.5 percent to 3.8350 per dollar as of 1:04 p.m. in Accra on Wednesday.