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April 17, 2021

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Nothing unlawful with GH¢22.5 billion support to govt – BoG

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The Bank of Ghana (BoG) has said there was nothing unlawful in making GH¢22.5 billion available to the government to support the government in 2020.

This comes after some members of Parliament have raised concerns about the move by the central bank.

The Director of Research of the BoG, Philip Abradu-Otoo, nothing unlawful has been done in making the funds available to government, as the total amount include funds from two programmes under the International Monetary Fund (IMF) and money to support the Consolidated Bank Ghana (CBG).

A statement by the BoG said Mr. Abradu-Otoo said GH¢10 billion of the cash represented the amount that was executed within the law under the Asset Purchase Programme which allows the Central Bank, the Ministry of Finance, and the Controller and Accountant General to meet to decide on the limit of borrowing to be made by Government.

The law further states that upon agreement of the limit, parliament should be informed, which according to him, was duly done. The bank subsequently paid the amount to government in two tranches, first, a GH¢5.5 billion in May 2020 and a GH¢4.5 billion in September same year.

Following that, the Director of Research added, the IMF Rapid Credit Facility of US$1 billion that was provided to the government to help deal with the COVID-19 pandemic situation was lent to BoG and the bank, in turn, further on-lent this facility – GH¢5.6 billion – to government. The IMF at the time of disbursement of the facility indicated that this was to be treated as budgetary support.

In providing a breakdown of the numbers, the Director explained that of the GHC 22.5 billion financing of the budget, GHC 10.0 billion represented the amount that was executed within the law under the Asset Purchase Programme. He explained that section 30 of the BOG Act, Act 612, 2002, provides for the Central Bank, the Ministry of Finance and the Controller and Accountant General to meet to decide on the limit of borrowing to be made by Government. The law further states that upon agreement of the limit, parliament should be informed. This amount of GHC 10.0 billion was given to Government in two tranches, first, a GHC 5.5 billion in May 2020 and second, a 4.5 billion in September 2020.

By Laud Nartey|3news.com|Ghana



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