Fiscal responsibility Act suspended – BoG on alleged breaches

The Bank of Ghana (BoG) has refuted claims that it has breached the Fiscal Responsibility Act insisting the Act is still suspended and yet to be reinstated by Parliament.

Ghana in 2018 passed the Fiscal Responsibility Act, Act 982, which enjoins the government to ensure that “the overall fiscal balance on cash basis for a particular year shall not exceed a deficit of five percent of Gross Domestic Product for that year.”

The 2022 budget however shows that in excess of GH¢40 billion was supplied by the central bank to tackle deficit in the budget, with many pointing fingers at the central bank for breaching the law.

But in a statement, BoG has refuted claims it has breached the Act.

The central bank asserts that during the peak of the CoVID-19 pandemic in 2020, the Act was suspended by parliament and remains suspended.

“It must be recognized that the ongoing debt operations are part of the corrective measures designed to address the financing problem of the budget. Bank of Ghana financing was part of a crisis management tool used in dealing with the difficulties of 2022.

“In 2018, the Parliament of Ghana suspended the Fiscal Responsibility Act, 2018 (Act,982) in view of the crises precipitated by the COVID-19 pandemic. The Fiscal Responsibility Act has not yet been reinstated by Parliament,” portions of the statement read.

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