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The Bank of Ghana has denied lending the government more than what was approved by Parliament last year.
According to the head of research at the Central Bank, Philip Abrodu-Otoo, he actually compiled the 10 billion ¢ that was agreed between the government, Parliament and the Bank of Ghana (BoG).
He argued that ¢ 10 billion was achieved under what can be called the asset purchase program which allows the central bank, the finance ministry and the comptroller and accountant general to know the government borrowing limits.
Mr Abrodu-Otoo said the BoG was ready to provide the necessary documents to substantiate its claim that it was not going beyond what had been approved.
“It’s already in the Bank of Ghana’s financial statements for last year and can be made available to Parliament,” added the research director.
Context
Minority leader in Parliament Haruna Idrissu during the audit of Finance Minister Ken Ofori-Atta and even during his approval in Parliament raised a red flag regarding BoG loans to the government.
This was after a summary of Central Bank operations in 2020 captured the Bank’s loans to the government at 22.5 billion cedis.
The Minority Leader has argued that he will begin investigations into the matter and will also have to call the Governor, Dr Ernest Yedu Addison, to appear before the House to provide answers on the matter.
BoG clarifies loans to government in 2020
Mr. Abrodu-Otoo explained that the additional ¢ 10 billion entered in the summary of his operations was due to certain funds from the IMF to the government and channeled through the Bank of Ghana as well as other arrangements. funding.
He said these should not be viewed as new loans to the government.
Breakdown of numbers
¢ 10 billion for asset purchase program
¢ 5.6 billion for IMF support to Covid-19
¢ 981 million in support from the IMF Covid-19
925 million ¢ to depositors of MFIs
¢ 5.068 million for financial sector monetization
Mr. Abradu-Otoo noted that under the financing deal, 5.6 billion ¢ was given to the government, based on the IMF’s extended credit facility which was supposed to help cope with the Covid-19 pandemic. The IMF made it available to the government in April 2020.
He noted that “the resources were loaned to the Bank of Ghana and later they loaned this facility to the government”.
The research director also added that the 981 million ¢ was in fact IMF resources that were associated with the completion of the 7th and 8 reviews of the IMF’s ECF program which began in 2015.
“The resources were not made available to the government in 2019, but reflected in the 2021 accounts,” added Mr. Abradu-Otoo.
There was another component of 925 million ¢, and that was basically the payment of interest owed to the Bank of Ghana on the non-marketable security.
Mr. Abradu-Otoo explained that “the terms of Covid-19 meant challenges the government was facing to repay, which is securitized by the Bank of Ghana.
The Bank of Ghana also argued that an additional ¢ 5 billion provided was essentially a monetization of financial sector bonds held by CBD to support their operational efficiency and help repay depositors.
He argued that the above explanation should clarify the ¢ 22.5 billion that was captured in the 2020 budget.
Mobilize Parliament
The Bank of Ghana added that it was surprised at the development as it had met with the Parliament’s Finance Committee for a development briefing.
He did, however, say he was ready to commit the house to the development again.
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