The Supreme Court yesterday dismissed a suit filed by Dr.John Epahraim Baiden , a legal practitioner and a banking lecturer against the Bank of Ghana (BoG), over the depre-ciation of the cedi.
Dr. Baiden had prayed the court to order the bank to put in measures to provide a stable currency after months of massive depreciation against major currencies.
The seven-member panel, presided over by Justice Sophia Adinyira, said the court did not have the institutional competence to direct the monetary policy determination of the Bank of Ghana, though that were mandated to protect and defend the constitution of Ghana.
According to them, granting the plaintiff’s relief of issuing an order of mandamus on the BoG or its governor and the board of directors to provide a stable currency and a change from a floating exchange regime to a fixed regime or a reasonable adjustable peg regime, thus, adopt policies designed by the Supreme Court, amounted to assuming the constitutional mandate exerted by the BoG.
They said the judicial standards did not permit them to do so.
The judges also indicated in their ruling that the Supreme Court was not the proper forum for the plaintiff to seek redress for his frustration with the management of the economy and the currency after losing wealth through foreign exchange rate variations.
They indicated that the rising inflation was a global phenomenon facing world giants like the United States of America.
They called for a radical change of attitude among Ghanaians, urging all and sundry to eschew giving excuses and execute every responsibility assigned appropriately.
They said at the time of deliberating on the case, the country’s currency had appreciated against the major foreign trading currencies which must be maintained.
Based on these facts the panel unanimously dismissed the case of the plaintiff.
The plaintiff, in his statement of case, noted that the BoG was overstepping its bounds and, as a result, hurting the cedi, urging the court to ensure that Ghanaians regained their “monetary sovereignty”.
According to the plaintiff, the BoG was enjoined by the 1992 Constitution and the Bank of Ghana Act to maintain a stable currency for the benefit of Ghanaians and businesses.
The plaintiff, who brought the action in his capacity as a Ghanaian who had lost wealth through foreign exchange rate variations, pleaded with the court to direct the BoG to provide a stable currency.
He further impressed on the court to order the BoG to abrogate the present dual exchange rate or multiple exchange rate system to a single exchange rate system.
The statement included a call for an order directed at the BoG to provide Ghana with a 1:1 or nearer relationship with the leading global reserve currency, as occurred in 2007.
Among the reliefs sought by the plaintiff, who joined the Attorney-General to the suit, was an order for perpetual injunction directing the BoG to refrain from deferring to a floating exchange rate regime in the conduct of its monetary policy.
He was also seeking a declaration that upon a true and proper interpretation of Article 183 (2) (a) of the 1992 Constitution of Ghana and the Bank of Ghana Act, 2002, Section 4 (b), BoG had neither promoted nor maintained a stable currency for the Republic of Ghana.
Article 183 (2) (a) of the 1992 Constitution provides, “The Bank of Ghana shall promote and maintain the stability of the currency of Ghana and direct and regulate the currency system in the interest of the economic progress of Ghana.”
He prayed the court to grant other orders it might deem appropriate, and held the view that the BoG knew it lacked the requisite reserves or exchange rate stabilisation fund to effectively intervene to give the cedi a stable value on the currency market.
Justifying his suit in a statement of case, he indicated that the action was brought in the interest of the public, pursuant to articles 2 and 130 of the 1992 Constitution of Ghana.
“In 2013, the local currency suffered a 17 per cent depreciation. The year-on-year depreciation shows a 21.96 per cent depreciation of the cedi against the dollar; 28.88 per cent against the pound sterling; 23.98 per cent against the Euro and 25.54 per cent against the Swiss Franc,” it said.
While imploring the court to direct the BoG to operate a fixed exchange rate regime, which he said was being practised by more than 60 countries, the plaintiff said East Timor, Ecuador, El-Salvador, Panama, British Virgin Islands, the Caribbean Netherlands, and Palau, among other nations, had adopted the US dollar as their local currency, which Ghana could imitate.
That regime, he explained, would provide a greater amount of certainty for importers and exporters and thereby maintain a stable currency within and outside Ghana for the economic progress of the country.
The plaintiff argued that unless the court stopped it, the BoG would continue “to utilise its unworkable monetary measures.”
According to him, the BoG was clearly out of its mandate and must, therefore, be checked.
Counsel for the BoG, Mr Samuel Codjoe, however, raised a preliminary objection against the plaintiff.
In his motion on notice for preliminary objection, he argued that the action had been wrongly commenced at the Supreme Court on the grounds that “the complaint of plaintiff is basically to the effect that second defendant had caused a depreciation in the value of the Ghanaian currency but deliberately couched as an application for interpretation of the Constitution in order to bring the action within the ambit of articles 2 (1) and 130 of the Constitution”.
“That the Supreme Court, in the exercise of its original jurisdiction, is not the proper forum for the interpretation of an Act of Parliament and it is, therefore, wrongful for plaintiff to have invoked articles 2 (1) and 130 to seek interpretation of Section 4 (b) of the Bank of Ghana Act, Act 612 in the Supreme Court,” the motion indicated.
By Edem Mensah-Tsotorme