The Bank of Ghana has denied lending to government more than what was approved by Parliament last year.
According to the Head of Research at the central bank, Philip Abrodu-Otoo, it actually compiled the ¢10 billion that was agreed between government, Parliament and the Bank of Ghana (BoG).
He maintained that ¢10 billion was reached under what can be described as the Asset Purchase Program which allows the central bank, the Ministry of Finance and the Controller and Accountant General on government’s borrowing limits.
Mr Abrodu-Otoo said BoG stands ready to provide the necessary documents to support its claim that it did not go beyond what was approved.
“It’s already in the Bank of Ghana’s financial statement for last year and that can be made available to Parliament” the Director of Research added.
The Minority Leader in Parliament, Haruna Idrissu, at the vetting of the Finance Minister Ken Ofori-Atta and even during his approval in Parliament raised a red flag about BoG’s lending to government.
This was after a summary of central bank operations in 2020 captured the Bank’s lending to government at ¢22.5 billion cedis.
The Minority Leader argued that it will begin investigations into the matter and will have to also call the Governor, Dr Ernest Yedu Addison to appear before the House to provide some answers on the issue.
BoG gives clarity on 2020 lending to government
Mr Abrodu-Otoo explained that the extra ¢10 billion captured in the summary of its operations was due to some funds that came from the IMF to government which was channelled through the Bank of Ghana as well other financing arrangements.
He said these should not be seen as fresh lending to government.
Breakdown of the numbers
· ¢10 billion for Asset Purchase Program
· ¢5.6 billion for IMF Covid-19 support
· ¢981 million IMF Covid-19 support
· ¢925 million to MFI depositors
· ¢5,068 million to Monetisation of Financial Sector
According to the Bank of Ghana, these are the break down of the ¢22.5 billion captured as its “lending” to government as reported in the 2021 budget.