Dr. Kwabena Donkor on Ghana’s Regulatory and Enforcement practice

Dr. Kwabena Donkor on Ghana’s Regulatory and Enforcement practice

In recent years, the Ghanaian polity has experienced upheavals in the socio economic space leading to a questioning of the ability of the State to sec

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In recent years, the Ghanaian polity has experienced upheavals in the socio economic space leading to a questioning of the ability of the State to secure its obligation as the protector of the public good and the elixir for socio economic development.

This protection of the public good finds expression in an agency arrangement with the citizenry through the intermediation of regulatory bodies and institutions. These institutions thus become the proxy embodiment of the State. Any deviation and or under performance by regulatory bodies constitute State failure and must be of great concern to the sovereign people and their representatives.

The current near meltdown of the financial sector, the seeming inability of the State to flush out illegal mining, the ever pervasive boat accidents on the Volta Lake, the chaotic land administration scene, the near depletion of our forests, the pollution of water bodies, the total disregard for building regulations and spatial planning, the degradation of the environment, the population of the market place with substandard goods, to mention but a few, are symptomatic of regulatory and enforcement failure.

And yet our statute book is replete with Regulatory bodies established by law and clothed with adequate powers. The Land Commission, the Minerals Commission, the Petroleum Commission, the Forestry Commission, the Securities and Exchange Commission, the Water Commission, the Town and Country Department, the Ghana Maritime Authority, the Fisheries Commission, the Insurance Commission, the Bank of Ghana, the National Petroleum Authority, the State Enterprises Commission, the Ghana Standards Authority, the Environmental Protection Agency,the Energy Commission, the Public Utilities Regulatory Commission, Medical and Dental Council, Institute of Chartered Accountants, the Food and Drugs Board etc. etc.are some of the key regulatory agencies established by law.

Regulatory bodies, unlike other agencies of Government, impose duties. They deliver obligations, rather than services.[i] Society arms regulatory and enforcement agencies with vast powers. They can impose economic sanctions, place liens upon or seize property, limit business practices, suspend professional licenses etc. They are given such awesome power because they protect the Public Interest. The protection of public interest ensures that society is safe from abuse. The physical health of society, the economic good and the social safety are manifestations of the collective security and safety of society. How regulatory agencies use these powers fundamentally affect the nature and quality of life in a democracy.[ii]

Mr. Speaker, it is therefore not surprising that in democratic jurisdictions, regulators are scrutinized more often and more closely than other agencies. The possibility of the abuse of power, the dereliction of duty and the jeopardizing of the citizenry, whether in the area of public health, the financial market or public safety impacts directly on the welfare and wellbeing of the citizenry and such institutions and agencies must therefore be held accountable for their stewardship of public resources.

Rt. Hon. Speaker, a cursory look at the stewardship of a few of these regulatory bodies paints a very worrying picture. I would want to cite the Bank of Ghana (in its roles as a Regulator), the Securities and Exchange Commission, the Minerals Commission, the Ghana Standards Authority and the Ghana Maritime Authority to argue that there has been gargantuan regulatory failure in Ghana and that this House must take a far more serious interest in regulatory bodiesand regulatory practice than it has done in the past.

Bank of Ghana

Section 4 (1) of Act 612 tasks the Bank of Ghana to among others, formulate and implement monetary policy aimed at achieving the objects of the Bank, promote by monetary measures the stabilization of the currency, regulate, supervise and direct the banking and credit system and ensure the smooth operation of the financial sector, promote, regulate and supervise payment and settlement systems and license, regulate, promote and supervise non-banking financial institutions

The various subsequent amendments such as Banks and Specialised Deposit Taking Institutions Act 2016 (Act 930), Bank of Ghana Amendment Act, 2016 (Act 918) have only essentially reiterated the enumerated regulatory functions and given the Bank as regulator, additional powers and functions. The independence of the Bank, as set out in Section 3(2) of Act 612 has been reinforced in the amendments.

The Banking Act 2004 (Act 673) makes it abundantly clear that no person is permitted to perform banking business without a license issued in accordance with section 4 of Act 673. The said Act also imposes a duty on the Bank of Ghana to verify information from applicants and to authenticate in a manner it deems fit. The law makes the two parties responsible in the acquisition of a banking license.

Mr. Speaker, Act 612 mandates the Central Bank to report to this august House, the Representatives of the sovereign people of Ghana, on its activities once every six months. A strict observance of the law and the exercise of vigorous oversight would have ensured that activities that the Bank viewed as putting pressure on the banking system would have been reported to the House in good time and with appropriate direction from the House, averted.

The distressed state of the banking and financial sector necessitating the collapse of banks, the huge loss of jobs and livelihoods, the broken confidence of in the banking system, the de-indigenization of the sector, botched attempts at public bailouts, etc have arisen because of regulatory failure. Regulation is not just meant to punish, but also in a developing country context, to build through technical and managerial direction and guidance.

Minerals Commission

The Minerals Commission is established by Article 269 of the 1992 Constitution and the Minerals Commission Act 1993 (Act 450).

Act 450 Sect 2 (1) states ‘The Commission is responsible for the regulation and management of the utilization of mineral resources and the coordination of the policies in relation to them’. Section 2 (2c) further tasks the Commission to ‘monitor the implementation of laid down policies of the Government on minerals and report on this to the Minister’. Section 2 (2d) further enjoins the Commission to monitor the operations of the bodies or establishments with responsibility for minerals and report to the Minister.

There is no doubt that the Law envisages a robust regulatory body with full responsibility for the minerals sector. The Mining and Minerals Act, 2006 (Act 703) further strengthens the regulatory role of the Commission by restricting the Minister from exercising any power, discretion, or making a determination or agreement without obtaining the advice and recommendation of the Minerals Commission.

Act 450 Section 17(2) mandates the Minister to submit to Parliament an Annual report received from the Commission. The law envisages that within a maximum of eight months of the expiry of each financial year, the Annual Report and any Statement the Minister responsible for the Sector may deem necessary to be in the custody of Parliament.


The Securities and Exchange Commission, established by the Securities Industry Act, 2016 (Act 929) is charged to regulate and promote the growth and development of an efficient, fair and transparent securities market in which investors and the integrity of the market are protected (Sect 2). It is to do this by among others (3b) (3c) maintaining surveillance over activities in securities to ensure orderly, fair and equitable dealings in securities and to register, license, authorize or regulate in accordance with the Act.

Section 17 (3) obligates the Minister to submit to Parliament within one month of the receipt of the Annual Report of the Commission.

Mr. Speaker, the Menzgold debacle ought not to have happened if the Securities and Exchange Commission had vigorously pursued its mandate. Thousands of Ghanaians have become worse off because a regulatory body, notwithstanding the very visible advertisement across the length and breadth of the country of an unlicensed derivative, chose to ignore the infraction of the law for a very long time until forced to confront the illegality.


The Ghana Standards Authority draws its existence from NRCD 173 of 1973. The decree provides for the Authority whose objects include (2a) establishing and promulgating standards with the aim of ensuring high quality goods produced in Ghana. Section 2(b) tasks the Authority to promote standardization in industry and commerce while 2(c&d) enjoins the Authority to promote industrial efficiency and development as well as public safety, industrial welfare, health and safety in the industrial space.

The Authority is thus clothed with powers to ensure industrial Standards in Ghana. Indeed, standards do not only apply to goods but services. In a survey conducted on some electrical good in Accra by a Task Force led by the Ghana Standards Authority, on 7.4% of the electrical goods passed. Standards are noted more by their non-observance than their observance. Imported electrical goods such as sockets and plugsfall within the very high non observance category.[iii]Mr. Speaker, the least said about the services sector, the better. Not a single MMDA has met the ISO 9000 (Quality Management) ISO 14000 (Environmental Management) or ISO 27000 (Information Security Management) standard. The result of non-observance of standards, particularly in the power retail sector, has led to a number of fire outbreaks with the attendance loss of lives and property. Mr. Speaker, may I dare suggest that the enabling law is obsolete and must be replaced. It is unwise for a critical regulator be still draw its powers from a Decree passed in 1973!


The Ghana Maritime Authority, established by the Ghana Maritime Authority Act, 2002 (Act 630) is charged to ‘regulate, monitor and coordinate activities in the maritime industry’ (Sect 2.1). Sect 2(2c) expands this further by adding the responsibility to regulate activities on shipping in the inland waterways including the safety of navigation in inland waterways. It is also to oversee matters pertaining to training, recruitment and welfare of Ghanaian seafarers.

Section 24 (2) obliges the Minister to submit to Parliament an Annual Report on the activities of the Authority. This should happen within a maximum of eight months after the end of the financial year.

The failure of the Ghana Maritime Authority to play its regulatory role especially on the Volta Lake results in the loss of lives and goods every year and a very rudimentary transport system. The irony is that water transport is meant to be the cheapest and most reliable means of transporting bulk cargo. The savings arising from cheaper freight couple with the ability to take off from the trunk roads considerably freight would also make our road last longer and reduce accidents on the roads. Unfortunately the Authority is yet to aver itself to this major developmental function. Mr. Speaker, the need to develop inland water transport system and to regulate it cannot wait. This House through its oversight role, must compel the GMA to be up and doing.

Rt. Hon Speaker, in any system, compliance is the way to maintain order and sanity for the going concern or society. In as much as the Regulator expects compliance from its applicants, the Regulator itself is also equally expected to comply with its own regulations such as:‘A persona shall not engage in downstream industry unless that person has been granted a license for the purpose,’ (section 11 of Act 691). If a person so initiates an engagement in downstream industry illegally, it is the duty of the Regulator to act under the guidance of the Act. Similarly, section 9 of the Minerals and Mining Act, ACT 703 prohibits persons from mining for a mineral unless the person has been granted a mineral right in accordance with the Act.

Compliance and enforcement, Mr Speaker, must not only be desired, but must be asked for. In seeking compliance, Regulatory bodies must themselves comply with the dictates of their enabling statutes. The vast number of these bodies do not for example submit their Annual Reports to Parliament in conformity with the time table provided in their very Acts. Rt. Hon Speaker, I dare say that Parliament has also not vigorously exercised it oversight over these regulatory bodies. A number of them hardly submit the required Annual report and when they do, it is done years late to be of real benefit to Parliament and the Nation. Mr. Speaker regulatory practice is a craft with well-defined goals. The choice and application of regulatory tools must be carefully considered to achieve desired goals and minimise, if not eliminate, undesired consequences. The Bank of Ghana as a regulator has either by accident or design created a climate that has diminished the presence of indigenous banks and promoted the prominence of foreign owned banks at a time the Ghanaian State is committing itself to the promotion of local content and ownership in the economic space.

Regulatory regimes, by their conduct, can take perfectly reasonable law and produce oppressive regimes. Similarly, by choosing wisely what to enforce, when, and the how, regulatory can take an unmanageable accumulation of laws, many of which might be obsolete, and deliver perfectly reasonable regulatory protection.

Neal Shower et al in their study of strip mining, observed “Now law is writ, and laws are rules. They are paper threats. They represent the State’s intent to regulate certain forms of behavior. But laws on the books mean little in and of themselves. They are meaningful only in so far as they are backed by the mobilization of state powers, law in action.”[iv]

Rt. Hon Speaker may I conclude by calling on this House to take a second look at how we exercise oversight over regulatory bodies and agencies. May we bring the appropriate Ministers to answer for the non-submission or late submission of Annual or bi Annual reports as the case may be. And may I humbly suggest that the House develops a mechanism for examining these reports other than the traditional referral to Committees or where the referral must of necessity be made to a subject matter Committee, the Committee report must be given prominence of place at the plenary. In my opinion, half of the challenges of governance in this country arise out of regulatory and enforcement failure. We as Members of this House are obliged by our Oath of Office to address this worrying clear and present danger to the very foundations of governance.

Thank you Rt. Hon Speaker admitting this statement.

[i] Malcolm K Sparrow, The Regulatory Craft (Brookings Institution Press 2000).

[ii] Ibid.

[iii] GSA Survey 7-10 August 2018

[iv] Neal Shower, Donald A Clelland & John Lynxwiler, Enforcement or Negotiation: Constructing a Regulatory Bureacracy (State University of New York Press, 1986 p.1-2

By: Dr. Kwabena Donkor