BoG, Finance Ministry finalise modalities for zero-financing of 2023 budget – Governor

Governor of the Bank of Ghana, Dr Ernest Addison has said that an agreement has been finalised with the Ministry of Finance on the modalities toward a Memorandum of Understanding for zero financing of government’s budget for the 2023 fiscal year and beyond.

According to him, the MoU is expected to be signed by both parties soon as Ghana awaits an IMF-supported programme which is expected to restore macroeconomic stability among others.

Speaking at the 111th Monetary Policy Committee press briefing on March 27, Dr Addison emphasised that the decision falls under the Staff Level Agreement reached with the Bretton Wood institution for an economic bailout for Ghana.

He further called on Parliament to pass the relevant revenue bills which are required as part of prior actions to advance Ghana’s programme to the IMF Executive Board.

“This will be critical in resetting the economy on the path of recovery, including putting it firmly on a disinflation path and sustained growth,” Dr Addison told journalists on March 27, 2023.

Earlier in January this year, the Central Bank hinted at the commitment by BoG and the Ministry of Finance to commit to zero financing of government’s budget for the 2023 fiscal year and beyond.

He explained that the move forms part of prudent macroeconomic policies which are expected to trigger a disinflation path and downward trends in the monetary policy rate which is now pegged at 29.5 percent.

“Monetary financing of the government deficit, which was pursued to prevent domestic defaults arising from systemic auction failures during 2022 will end under the programme,” Dr Ernest Addison earlier said at the 60th-anniversary launch of the Institute of Chartered Accountants Ghana (ICAG).









MA/FNOQ