BoG gives govt GH¢5.5billion towards coronavirus fight

Finance Minister Ken Ofori-Atta, has revealed that the Bank of Ghana (BoG) has advanced GH¢5.5 billion to the government this month to meet its financial obligations in the wake of the COVID-19.

The GH¢5.5 billion first installment of the bond was released on May 15, 2020, he said while addressing Parliament after tabling a report to Parliament over the government’s plan to trigger section 30 (6) of the Bank of Ghana Act, on Thursday May 28.

“Given the exceptional circumstances and the challenges, the Minister of Finance, the Governor of the Bank of Ghana and the Controller and Accountant General, as required under Section 30 of the Bank of Ghana (Act 612) as amended, have agreed to trigger the emergency financing provision under the law which permits increasing the limit on the purchase of Government securities by Bank of Ghana in the event of any emergency to help finance the residual expenditures,” the Minister said.

Mr Ofori Atta further said apart from the support from the central bank, some of the financing measures identified by the Government include IMF Rapid Credit Facility of US$1 billion, World Bank Development Policy Operation (DPO) of US$350 million, Stabilization Fund US$219 million but that still results in a residual financing gap of about GH¢17.9 billion to be sourced from both domestic and external markets.

He said as a result of the pandemic with its attendant domestic market challenges there has been a reduction in liquidity on the market, with sell-off by non-resident investors.

“Therefore financing the residual gaps would not only significantly increase interest rates but would be counterproductive by denying the private sector access to cheaper sources of financing,” the Minister said.