The Supreme Court will on Thursday hear the substantive case in which a lawyer and banking lecturer, John Ephraim Baiden, is asking the court to order the central bank to stabilise the local currency after bouts of massive depreciation against major currencies.
Mr. Baiden in March this year filed the case at the country's apex court, seeking among others a declaration that “upon a true and proper interpretation of Article 183(2) (a) of the 1992 Constitution and Bank of Ghana Act 2002, Section 4(b), the Bank of Ghana has neither promoted nor maintained a stable currency for the Republic of Ghana”.
The plaintiff stresses in his case that the cedi's rate of depreciation over time does not show the central bank to be promoting and maintaining a stable currency for economic progress, and wants the court to concur and order the bank to stabilise the currency.
Mr. Baiden said the falling currency has caused him to lose wealth through exchange rate losses, and that he brought the action in the public interest.
Despite several measures by the BoG to stem the pernicious slide of the cedi, it didn't prevent the local currency from falling from GH₵2.16 at the end of December 2013 to about GH₵3.19 as at yesterday.
Kofi Wampah, BoG Governor
The central bank had initially raised a preliminary objection to hearing of the case, arguing that the plaintiff had chosen the wrong forum to bring his complaint. But the Supreme Court, at its first sitting on the matter in July, asked the central bank to respond to the plaintiffs case before the preliminary objection would be considered.
Responding to the writ, the BoG argued that “granting the (plaintiffs) reliefs would definitely move the court beyond areas of judicial expertise. What the plaintiff is seeking from this court is his solution to what in his opinions would ensure a stable monetary environment”.
Lawyers for the BoG said the case before the court is a “non-justiciable political question that should be kept out of the court. To state it is prudent the court should decline the invitation to make orders which do not belong to the courtroom would be stating the obvious”.
Granting the reliefs of the plaintiff, the BoG said, would require the Supreme Court to become either a department of monetary affairs of state, a state monetary advisory court, or to exercise the Ministry of Finance's functions.
“This court would have to make technical monetary decision(s), including making a strategic preference for a fixed exchange rate regime as opposed to what the plaintiff claims is the prevailing floating exchange rate regime,” the central bank argued, praying that the suit be dismissed as being misconceived.
Responding to the issues raised by the central bank, the plaintiff said the BoG's defence failed to respond to the issues he had raised, pertaining to the bank's inability to maintain a stable currency. He said the central bank did not challenge his data on the cedi's performance, and did not also contest the fact it has not been able to promote and maintain a stable currency as the Constitution demands of it.
Regarding whether the case is justiciable or not, the plaintiff argued that it is not for the central bank to determine that question but the Supreme Court.
“It is not the function of parties to determine a non- justiciable political question, but that of the court,” Mr. Baiden said in his counter response to the Bank of Ghana's arguments.
The case could have a profound impact on economic management, given its invitation to the Supreme Court to define a stable currency and give guidance to the Bank of Ghana on how to achieve it.