BoG zero financing of government budget will affect Ghana's economy - Economist

Economist, Dr Adu Owusu Sarkodie is against the decision of the Bank of Ghana (BoG) to not finance the government’s budget.

According to him, the policy if implemented considering the current state of the country’s economy, would further hurt the country’s finances.

Explaining his stance, the economist indicated that, the current structure of the economy is such that, for Ghana to have a robust economy, the country should have up to 5 per cent Central Bank financing of the government’s budget.

Dr Sarkodie is of the view that government owns BoG, as such, when the country is in crisis, the Central Bank should be able to support the economy.

“I was one of those who wrote and spoke against it when Ghana secured a programme with the IMF in 2025 and one of the conditions was the Zero Financing of Government’s Budget”, he said in an interview on Accra-based Joy News.

He added, “There should be some limit when it comes to the financing of government’s budget but for zero financing looking at the current state of the economy.”

Due to the Central Bank's participation in the Domestic Debt Exchange Programme (DDEP) which led to GH¢60 billion in impairment losses, many have been calling for strict enforcement of the Zero Financing Policy of the government’s budget.

As part of the conditions for the government to secure a $3 billion loan bailout from the International Monetary Fund (IMF), the Bank of Ghana earlier this year started enforcing the zero financing policy.

The policy dictates that the Central Bank would no longer provide financing to the government under the current IMF programme which will span three years.

EAN/MA

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