Net claims to government is GH¢44.5 billion – BoG clarifies

The Bank of Ghana says its net claims to government as of December 2022 was GH¢ 44.5 billion.

This consisted of GH¢ 7.2 billion purchase of treasury bonds from banks to provide them with liquidity and GH¢ 8.9 billion on-lending facilities granted by the International Monetary Fund (IMF).

It also included GH¢ 37.9 billion overdraft extended to government, solely meant for the purpose of addressing auction shortfalls and paying customers.

“At the same time, Government Deposit liabilities at the Bank of Ghana recorded an increase of GH¢ 9.5 billion in the course of 2022,” the BoG stated in a release.

It explained that these interventions were made at a time when Ghana had lost access to the International Capital Market, domestic revenue was significantly underperforming and not realized, pushing the state of government finances into near external and domestic default.

“The government needed to finance critical expenditures for which Bank of Ghana needed to provide the necessary financing to avert a disorderly default of both servicing for domestic and external debt including financing critical imports to keep the economy on the stable path” it said.

BoG, therefore, said it was inaccurate for the impression to be created that the IMF came and uncovered the extent of the overdraft.

“it was agreed that this temporary arrangement was needed as part of a comprehensive solution to be addressed in the Government’s economic policies and programmes to be supported by the IMF,” the statement said.