What is the new limit? – Watch Randy Abbey’s ‘clash’ with Bawumia’s aide on BoG-GoG lending cap

A new limit was set for Bank of Ghana (BoG) lending to the government for the year 2021, an aide to Vice President Mahamudu Bawumia has revealed.

Gideon Boako said on Accra-based Metro TV that he was privy to discussions around the matter but that the limit must have been formally communicated to parliament.

His stance on disclosing the new limit led to a heated exchange with host of Good Morning Ghana show, Randy Abbey on the August 22, 2023 edition of the show but Boako stood his grounds 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.

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.

That limit must be reached after a meeting between the finance minister, the BoG governor and the Controller and Accountant General; thereafter, the minister must inform parliament.

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

Below is an exchange between Randy and Gideon Boako

Randy Abbey: We all know in 2020, there was a specific request by the finance minister, for the 10 billion which parliament approved. There is document before parliament… because the 30 (6) you are speaking about is where the finance minister, BoG governor and Controller and Accountant General agree on a new ceiling and then the finance minister informs parliament.

As we speak today, which ceiling, when did the finance minister inform parliament that the three people have met and this is the new ceiling?

Gideon Boako: This is what the governor says

Randy Abbey: But I am saying if that had been done, all of us will know.

Gideon Boako: Well, I take the governor’s word at this point.

Randy Abbey: I am saying that there is a ceiling of 5% of the previous year’s tax revenue. That is a ceiling, the law allows that in times of emergency, the three can meet for a new ceiling to be set. Before that, the aw even says that when the Central Bank hits the 5% ceiling, the governor must inform the finance minister and the finance minister must inform parliament… and also he should inform parliament about the remedial measures being taken to avert same. That has not happened. That is one.

That minister must inform parliament that the three have met and agreed on a new ceiling, that also has not happened.

Gideon Boako: As I sit here, I’m unable to…

Randy Abbey: You work with the Economic Management Team, if we had a new central bank lending ceiling, would you not know? Would Members of Parliament not know?

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

Randy Abbey: What is the new ceiling, the new limit? If you know that a new limit was set, what is that new limit?

Gideon Boako: 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.

The recipient of that communication is parliament, so, parliament has not come out officially to deny this, just as the governor has come out officially, so, let the recipient of that communication come and say that what the governor said is not true so that we have a case to talk about.



SARA

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