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Credit Facility Ghana’s IMF programme under threat over reform conditions

The Bank of Ghana Amendment Bill seeks to prevent the government from borrowing from the central bank.

  • Published:
Seth Terkper play

Seth Terkper

Ghana could lose out on the third tranche of $114 million yet to be released to the country under the International Monetary Fund (IMF) three-year extended credit facility over failure to pass two crucial Bills.

Under the programme, the Government of Ghana pledged to pass the Bank of Ghana Amendment Bill and the Public Financial Management Bill.

The Bank of Ghana Amendment Bill seeks to prevent the government from borrowing from the central bank.

READ MORE:BoG to submit bill to parliament backing zero-financing of gov't

IMF play

IMF

 

Under the current arrangement, the government is allowed to borrow up to 10 percent from the Bank of Ghana.

The IMF is insisting that these two laws get passed before they disburse the third tranche of $114 million to government coffers.

The IMF board rescheduled its July meeting to discuss the release of the third tranche to September due to ‘outstanding issues.”

A member of Parliament’s finance committee, Dr Mark Assibey Yeboah, says “technically” the IMF has suspended its programme with Ghana.

READ MORE: Zero financing of BoG 'premature' - IFS

He disclosed that members of the finance committee made “nonsense” of the provision seeking to prevent the government from borrowing from the central bank.

“There is no country in the world where you can say for sure government cannot borrow from the central bank,” Assibey-Yeboah told Joy FM. “I disagree, I don’t see why the government should tie its own hands and say that I the shareholder of the central bank cannot borrow when I have revenue problems.”

Assibey Yeboah said the committee proposed five percent instead of the zero percent financing the IMF was seeking in the amendment bill,  a move he said the IMF would not be happy with.

He noted that other provisions in the Bill such as taking off the ministry of finance representative from the board of the BoG and also not appointing government functionaries to the board were also rejected.

Dr. Mark Assibey-Yeboah play

Dr. Mark Assibey-Yeboah

 

“When the report is laid…you will see that the key ingredients of the IMF prepositions in the amendments parliament have made nonsense of it, and the IMF will not be happy, and that could go further to hamper disbursement that we seek, $114 million.

“Not only the 114 million, when the IMF disburses, the world bank disburses, donor partners will also disburse so we are looking forward to about $400 million being held right now until the passage of these two bills.

“From where I sit and how I see things, technically, the IMF has suspended the programme with the country,” he told Joy FM.

Parliament of Ghana play

Parliament of Ghana

 

According to him, it is because “we are not sticking [to] the rules of the game.”

Assibey Yeboah also savaged Ghana’s negotiations team led by former finance minister Kwesi Botchey for agreeing to the zero financing.

“The negotiations were bad to start with. Those negotiations led by Kwesi Botchey at the time they were bad because how can you go and agree that there should be zero percent financing?” he quizzed.

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