Bank of Ghana gives breakdown of GH¢22.5 billion grant extended to govt in 2020

Ghana’s central bank has provided a breakdown of a GH¢22.5 billion grant facility it extended to the Government of Ghana in 2020.

Some Members of Parliament before the House have questioned the grant and described it as a breach of the law.

Director of Research at the Bank of Ghana, Philip Abradu-Otoo, providing clarity on the grant pointed that no laws have been breached in making the funds available to the government.

A statement sighted by GhanaWeb contained further details of the grant which were primarily made available under two programmes from the International Monetary Fund (IMF) and funds to support the Consolidated Bank of Ghana (CBG).

The Director of Research explained an amount of GH¢10 billion from the grant represented the amount that was executed within the law under the Asset Purchase Programme.

He said this allowed the central bank, Controller and Accountant General and the Ministry of Finance to hold deliberations to decide on the cap of borrowing allowed government.

Following an agreement on the limit for borrowing, the Director of Research said Parliament was duly notified on it which is in accordance with the law.

“The IMF Rapid Credit Facility of US$1 billion that was provided to the Government of Ghana to help deal with the COVID pandemic situation. This was made available to Government in April 2020. This IMF resource was lent to the Bank of Ghana and the bank further on-lent this facility to Government. The IMF at the time of disbursement of the facility indicated that this was to be treated as budgetary support,” the statement explained.

“Through the Central Banks on-lending operations, the Bank of Ghana created a claim on Government to that amount and credited Government deposits, same. The amount involved here was GH¢5.6 billion (ii) In addition, we may recall that Extended Credit facility Programme which begun in 2015, expired in 2019,” it added.

The statement continued, “Resources from the completion of the 7th and 8th review of the program was made available to Government by the IMF in December 2019. Governments accounts were credited with the cedi component of the facility in the first quarter of 2021. Here too, the IMF indicated that the resource was to be applied as budgetary support which resulted in a claim of GH¢0.98 billion being raised by the Central Bank against Government”.

See the full breakdown below: