BoG has Printed Gh¢5.5bn to finance GoG’s Operations and is Planning to Print even more – Ato Forson

Cassiel Ato Forson,

Cassiel Ato Forson,

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According to the Member of Parliament for the Ajumako-Enyan-Esiam Constituency in the Central Region and a former minister for Finance Cassiel Ato Forson, lthe Bank of Ghana has printed GhC5.5bn to finance GoG’s operations and is planning to print even more.

He said despite President Akufo-Addo’s vociferous public debt politics in opposition, he has added some Gh¢116 billion to Ghana’s public debt.

He argued that, analyzing the summary of Economic and Financial Data for May 2020 put out by the Bank of Ghana reveals that in just 3 years and a few months, the current government increased Ghana’s debt from Gh¢120.3 billion in December 2016 to Gh¢236.1 billion by 31st March 2020.

Ato Forson also said “It is even more troubling to note that if the public debt is shared among all Ghanaians, each of us owe a whopping GhC7,836.00.” 

Below Are Other Observations He said he realized that he highlighted are below:

  • First, it is wrong for the Bank of Ghana to express the actual public debt as at 31st March 2020 as a percentage of the projected GDP for end of the year, that is December 2020 which creates an obvious erroneous impression.
  • Secondly, BoG is using December 2020 projected nominal GDP of GhC398,048 billion instead of the official projected nominal GDP of GhC385,251 billion which the government shared with the IMF in April 2020.
  • In effect, the Bank of Ghana is deliberately using a higher Nominal GDP to create the false impression that government’s nominal debt as percentage of GDP is low. This is intellectual dishonesty and dangerous not only to Ghanaians but to the investor community. This is not only shameful but goes a long way to damage the otherwise reputable image of the BoG.
  • Bank of Ghana should be reminded that it is not a political institution but an important technical and professional institution of State whose reputation is very crucial to Ghana’s economic progress.
  • I therefore call on the BoG to as a matter of urgency come clean and rectify what is now an exposed plot to deceive Ghanaians and the investor community.
  • Thirdly, I wish to draw the attention of the Governor and the Minister of Finance to Section 30 of the Bank of Ghana Act, 2002 (Act 612) as amended by the Bank of Ghana (Amendment) Act, 2016 (Act 918) regarding the breach of the ceiling for central bank financing that has occurred.
  • The 2019 Domestic Revenue was GhC51,988.01m and 5 percent of this is about GhC2,599.40m
  • Regrettably, the Bank of Ghana has already disbursed GhC5.5bn to finance Government of Ghana’s operations without recourse to the laws of Ghana.
  • In clear terms, the Bank of Ghana has printed GhC5.5bn to finance GoG’s operations and is planning to print even more. This is a flagrant breach of the Bank of Ghana Act.
  • The Minority in Parliament therefore cautions the Governor of the Bank of Ghana, that there are consequences for his actions.
  • In any case, why has the Bank of Ghana become an extension of the Ministry of Finance? Instead of government aggressively embarking on fiscally austere measures such as pruning down the size of government by cutting down the number of government appointees to make savings, government is rather stampeding the resources of the Bank of Ghana at will.
  • It is time to end the financial recklessness and give way to prudent and credible management of the economy to avoid this #TotalFailure

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