Collins Adomako-Mensah, Member of Parliament for Afigya Kwabre North has denied knowledge of a new Bank of Ghana (BoG) lending threshold to the Government of Ghana (GoG) for the year 2022.

He stated that he also did not know of any communication of same to the parliament at any point in time.

His view contradicts that of Ernest Addison, the BoG governor, who said at a recent press conference that a new limit was agreed and formally communicated to parliament by the finance minister.

An aide to Vice President Mahamudu Bawumia, Gideon Boako; also said on Accra-based Metro TV that he was privy to discussions around the matter but that the new limit must have been formally communicated to parliament.

Speaking on the same show on August 23, 2023, the MP who is also a member of the finance committee of the House denied knowledge of a new lending cap.

"I am not aware of any new lending threshold, I am not aware… I read the governor’s statement, I must probably have to go back and read the finance minister’s statement. I am not aware.

Asked if he did not listen to the finance minister's address earlier this year on the Domestic Debt Exchange Programme (DDEP), he responded: "Finance minister did not come to the finance committee and the law does not say he should come to the finance committee, the law says he should brief parliament."

He confirmed having read the DDEP-IMF statement, which was upon a request from an MP for the minister to brief the House. "I didn’t see an announcement of a new limit as in the threshold… and I am being very frank," he added.



New limit 'secret'

Pushed to disclose the new figure by host of Good Morning Ghana show (August 22, 2023) the aide to VP Bawumia held back stressing that it was for the finance ministry and government to communicate same.

He also referred to the central bank governor's recent claim via a press conference that applicable laws were triggered in 2020 at the height of the COVID-19, to allow a new limit to be set by relevant stakeholders.

"As far as I know, what the governor is saying is accurate and true, as far as I know, when these things happened, the section 30(6) was triggered and pursuant to this section… the arrangement that has to be made was made," Boako submitted.

Show host Randy Abbey pressed for the new limit: "What is the new ceiling, the new limit? If you know that a new limit was set, what is that new limit?"

Boako held back explaining: "It is not within me to say that this was the limit… perhaps the question that we need to ask is to challenge parliament or perhaps the governor to provide further and better particulars.

"It is the finance minister and government who must communicate that publicly, not me. That is not for me to communicate. These discussions have been had, the limit has been set. The law says it is the finance minister who must report to parliament, not me to sit on radio or TV," he added.

By law, the central bank is to lend as much as 5% of the previous year's tax revenue to government except in emergency cases where a new limit can be agreed after a meeting between the finance minister, the BoG governor and the Controller and Accountant General; thereafter, the minister must inform parliament.

It has come to light that the BoG exceeded the 5% ceiling in lending to government and the bank through its governor has explained why.

What the governor said about new lending limit

When Ghana was hit with the Covid-19 in 2020, Section 30(6) of the Bank of Ghana Act (612), as amended, was triggered, and as indicated earlier, the Bank purchased GHC10 billion worth of Covid-19 bonds to support the economy through the pandemic.

This was done within the applicable laws governing the Bank of Ghana. When section 30 (6) of the Bank of Ghana Act (612), as amended, is triggered, it, allows the Governor, the Minister for Finance and the Controller and Accountant General to agree on a new limit of central bank financing.

The law further says that the Minister of Finance will then have to inform parliament and the Minister has since informed parliament as part of his briefing to update Parliament on the IMF program and status of the Domestic Debt Exchange.

SARA

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