Don’t amend BoG Act to allow govt borrow beyond set threshold – IMANI

IMANI Ghana has raised red flags against proposals to amend the Bank of Ghana Act in order to increase government’s borrowing threshold at the central bank.

This reaction comes on the back of government proposing that in the event of tight domestic financing market conditions, it must be allowed to secure funds from BoG above the stipulated level.

The policy think tank believes that setting aside or amending these two fundamental laws - namely the Bank of Ghana Act, 2016 (Act 918) and the Petroleum Revenue Management Law (Act 815) - is opening up a 'can of worms' which the country has struggled with, in its immediate economic past.

A new policy brief released by IMANI Ghana, dubbed “Don't let the short-term crisis measures reverse regulatory gains made in supporting prudent fiscal behavior”, argued out some fiscal measures taken by government to mitigate the impact of the covid-19 pandemic on the economy.

The brief contended that “the medium to long-term costs of (i) allowing withdrawals from the Heritage Fund and (ii) revising the BoG Act to accommodate financing of about 10% of the previous year revenue [as seen in other reports not officially communicated], is not the best approach”.

IMANI further stated that “the government does not need to set back the gains made in legislation and reform for prudent fiscal behaviour, for short term gains”.

Below is the full policy brief