|Dr John Ephraim Baiden, plaintiff, leaving the court after judgement. PICTURE: MAXWELL OCLOO|
A writ invoking the original jurisdiction of the Supreme Court to order the Bank of Ghana (BoG) to put in measures to provide a stable currency has been dismissed.
A legal practitioner, Dr John Ephraim Baiden, filed the suit in March 2014, asking the court to issue 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.
He also urged the court to order the BoG to abrogate the present dual exchange rate or multiple exchange rate system to a single exchange rate system.
Dr Baiden further prayed the court to direct the BoG to provide Ghana with a 1:1 or nearer relationship with the leading global reserve currency, as occurred in 2007.
Preliminary objection upheldBut the Attorney-General’s office and the BoG, who were the respondents in the case, filed separate motions challenging the locus of the court to pronounce on the subject matter.
According to the defendants, the Supreme Court was not the forum for monetary issues to be determined.
Granting the prayer of the respondents to dismiss the suit, the court, presided over by Mrs Justice Sophia Adinyira, held that “this issue does not require constitutional interpretation. This is not a proper forum for plaintiff to ventilate his frustration”.
“The preliminary objection is upheld and the plaintiff’s action is dismissed,” the court concluded in response to Dr Baiden’s claim he had lost substantial wealth as a result of the more than 130 per cent depreciation of the cedi since 2007.
Stable currencyTouching on the plaintiff’s call on the court to order for a fixed rate to stabilise the cedi, the court said the Supreme Court was not the best forum to determine a stable currency for Ghana.
“The court does not have the institutional competence to direct the Bank of Ghana to stabilise the currency,” it added.
ObiterIn a comment, the court was of the view that the effect of inflation was a global issue and cited Germany and the United States (US) as some of the countries facing those challenges.
It said the economy would thrive if: money was kept in banks, agriculture was promoted to reduce the importation of food and Ghanaians bought made-in-Ghana goods.
It urged Ghanaians to eschew mediocrity and work hard to increase productivity.
It expressed its excitement over the appreciation of the cedi and prayed it remained so.
Speaking to journalists after the court’s judgement, Dr Baiden expressed disappointment but indicated he would not file for a review.
BackgroundDr Baiden, in his statement of case, urged the court to give orders aimed at ensuring 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.
Among the reliefs sought by the applicant 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 also prayed for 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), the 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.”
Dr Baiden was of the view 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.
Public interest actionJustifying his suit in a statement of case, he said he had brought the action in the interest of the public, pursuant to articles 2 and 130 of the 1992 Constitution.
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, Palau, among other nations, had adopted the US dollar as their local currency.
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.
Stop Bank of GhanaDr Baiden had 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 whipped back in line.
Preliminary objectionThe motion on notice for preliminary objection filed by the BoG had 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 has 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 concluded.
The court finally upheld the respondents’ position and, accordingly, threw out the writ.