News available to The Statesman newspaper indicates that the National Democratic Congress is putting pressure on the Bank of Ghana to print extra money in excess of 2 billion Ghana cedis. This was contained in an unusual letter from the Minister of Finance to the Governor of the Bank of Ghana.

But, the Statesman can report that outgoing Governor, Paul Acquah, is resisting every pressure to print such high amounts of cedis to worsen the country’s already bad inflationary pressures. Year-on-year inflation was 20.5 percent in July and government has even revised its end-of-year inflation target upwards by 2 percentage points to 14.5 percent.

Officials of the BoG are however nervous that Kwesi Bekoe Amissah-Arthur, who takes over Tuesday, September 1, as Governor may succumb to the pressure from his party. He was a campaign aide to President Mills during his presidential bid.

Ironically, he also served as Deputy Minister of Finance in 2000 when Kwabena Duffuor was Governor of the Central Bank. That year ended with Ghana’s macroeconomic indicators seriously destabilized, with inflation at 40 percent and interest rates at 50 percent, and the cedi losing its value to the dollar by 97 percent.

The letter, requesting for the money, explains that Government is under pressure to pay off arrears owed to contractors and money is urgently sought for that purpose. In the past eight months alone, the NDC government has sourced out contracts valued at half a billion Ghana cedis.Checks made by newsmen raised serious issues about the integrity of many of these contracts. Already, there were some one billion Ghana cedis worth of contracts performed but payments of which were suspended by the Mills administration.

Reading his supplementary budget last week, Finance Minister, Kwabena Duffuor made a controversial claim that Ghana’s budget deficit for last year has to be revised to 24.2 percent of gross domestic product. He got this figure by including debts of 1.7 billion cedis ($1.16 million).

This compares with an earlier estimate of 12.1 percent (including divestiture receipts) and comes after “arrears and commitments had been taken into account,” Duffuor told Parliament.However, deficit is calculated as the difference between the money government takes in, called receipts, and what the government spends, called expenditure, each year. Debt, on the other hand, is an accumulated flow of deficits.

Thus, whereas deficit is a flow, debt is a stock. When there is a deficit, the Finance Ministry must borrow the money needed for the government to pay its bills, usually by selling Treasury Bills or bonds. Yet, the NDC, by the letter to the Governor, seeks to have more money printed.