Finance ministry diffuses media reports on inability to pay salaries

The Ministry of Finance, has described as wrong a media publication which creates the impression that Government does not have money to pay salaries of its workers for September, 2016.

“The attention of the Ministry for Finance has been drawn to a publication in the Daily Guide of 14th September, 2016 issue No. 216/16 which created a wrong impression that Government does not have money to pay salaries of its workers for September, 2016”, it said.

The publication indicated that the financial position of government has reached a crisis point and in apparent reaction to the situation, the Controller and Accountant General had instructed the Bank of Ghana to transfer an amount of GHS 469,176, 900 from some MDAs accounts for payment of salaries for August, 2016.

Meanwhile, in a response to the publication, a release signed by Patrick Nomo, Acting Chief Director of the Ministry said the publication lacks credibility and facts as it created the impression that either government was wrong in transferring funds from its own accounts as part of its cash management strategies and so it should be disregarded.

In their case, the facts are that the Ministry of Finance on the 24th August, 2016 through the Controller and Accountant Generals’ Department (CAGD) authorized the Bank of Ghana to transfer funds from the accounts of some selected MDAs/MMDAs under government’s Treasury Single Accounts (TSA) policy.

“Under the TSA and the Bank of Ghana zero financing policy of government business, the Ministry considers the consolidated bank balances of government to determine government cash position and through that identifies any idle funds to utilize before going to the market to borrow money at an interest cost. It would have cost government about GCH 9.2 Million at Treasury bill rate of 22% for one month if the Ministry were to borrow GHS 500 million from the market while these cash are idle”, it explained.

It pointed out that government’s position based on the TSA on the said date shows that some accounts of MDAs/MMDAs had some balances and therefore decided to utilize such funds as the first option instead of borrowing funds from the market at an interest cost.

“The Ministry wishes to further state that the monies were not used for only salaries as government through its prudent cash management policies has opened a Compensation of Employees accounts at Bank of Ghana into which funds are transferred consistently throughout the month to meet salary obligations at the end of the month. It is therefore not true that government was in dire need of money and therefore had to transfer monies from the accounts of MDAs to pay salaries”, it further explained.

It therefore informed MDAs/MMDAs, stakeholders and the general public that the CAGD has since reimbursed those accounts which needed the funds as a result of the transfers, debunking the statement that the decision of government has affected the operations of the MDAs/MMDAs.

The Ministry thus assured MDAs/MMDAs, stakeholders and the general public that government is committed to prudent financial management through sound cash management and cost effective policies with the overall goal of preserving the public purse.