All the times BoG has allegedly printed money for government 'illegally'

The Central Bank's seeming 'illegal' printing of money to finance the government's projects and expenditures have been a major source of concern for most Ghanaians especially the minority in parliament.

The Bank of Ghana's actions have been tagged as a breach of the financial management act which demands that parliamentary approval is sought before any of such exercises are embarked on.

Even though the Central Bank justifies the claims when they arise, it remains a source of worry for the country's current economic stature.

In this article, here is a list of all the times such allegations have been levelled against the Central Bank.

BoG illegally lent government GH¢70 billion – Isaac Adongo alleges

On November 8, 2023, the Member of Parliament for the Bolgatanga Central constituency, Isaac Adongo, accused the Governor of the Bank of Ghana, Dr Ernest Addison, of lending an amount of GH¢70 billion to the government.

According to him, the money taken from the central bank was used to finance the government's maturing debts on the domestic market.

The move, Adongo said, was contrary to the Bank of Ghana's Financial Management Act.

Addressing the media on Tuesday, November 8, 2022, he said, “There are strict rules on which the Government of Ghana can borrow from the Bank of Ghana, and the strict rules are quite clear, stating that, the Bank of Ghana at any point in time should have lent more than 5 percent of the previous revenue cumulatively."

He added that “If you consider last year’s revenue, the government cannot even borrow less than GH¢5 billion from the Bank of Ghana, but by the end of the year 2021, Dr Addison had illegally lent over GH¢35 billion and by May this year he had added GH¢22 billion."

"As we speak today, Dr Addison has been financing the government and paying maturing debt obligations on the domestic market that the government cannot fund. We are currently looking at something in the region of GH¢70 billion of illegal borrowing by the government of Ghana through the Bank of Ghana,” the Bolgatanga Central MP stated.

BoG's response

The Bank of Ghana has debunked allegations by the Member of Parliament, Isaac Adongo, that the Central Bank lent a total of GH¢70 billion to the government from 2021 to date.

According to them, the allegations are false and unfounded.

In a press statement debunking the claims and providing "the facts", the BoG said: "The Bank of Ghana’s attention has been drawn to a press engagement by the Member of Parliament for Bolgatanga Central, Hon. Isaac Adongo, on 8th November 2022 during which he provided some false data and made unfounded allegations."

"The allegations aimed at impugning the hard-won credibility of the Bank of Ghana and its Management," it added.

RAto Forson's claims of "illegal" printing of money by BoG

On July 25, 2022, The Minority leader, Cassiel Ato Forson, alleged that the Bank of Ghana printed GH¢22.04 billion without the government's approval.

He noted that this was part of the causes of the country's current crisis.

However, the Central Bank refuted the claims.

BoG's response The Bank of Ghana responded to allegations indicating it had printed an amount of GH¢22.04 billion to finance government’s budget without parliamentary approval.

But the central bank in its response clarified that the amount represents net claims on government and not new currency printed to support the government's budget.

In a statement issued by the BoG, it also clarified that the net claims of GH¢22.04 billion as captured in the 2022 mid-year budget review has four components:

1. GoG Stocks and bonds sold by commercial banks to Bank of Ghana under repurchase agreements, by which banks routinely manage their liquidity positions;

2. IMF SDR allocation disbursed to Government through Bank of Ghana;

3. Draw-down of Government’s own deposits held with Bank of Ghana;

4. Negative balance on Government’s account with Bank of Ghana at a point in time, and self-liquidated as new Government deposits are credited to the account.

Fresh claims in 2023

On February 1, 2023, Cassiel Ato Forson made fresh claims whiles accusing the Governor of the Bank of Ghana, Dr. Ernest Addison of breaching the regulations guiding the work of the central bank.

According to him, Ghana’s current economic challenges including the high inflation and hikes in Monetary Policy Rate is a result of the actions and inactions of the central bank.

“Inflation is largely @54.1% & MPR is now @ 28%. We are largely here because BoG has so far printed over GH¢50bn in one year & depleted net intl reserves to record low as of end-Dec. 2022,” he wrote on social media.

The Minority Leader, however, cautioned that the people whose actions have caused this development will be held responsible for their deeds.

“Those destroying livelihoods of Ghanaians will soon be held to account,” he added.

BoG's reponse

The Bank of Ghana (BoG) justified its decision to print over GH¢40 billion for the government to finance the 2022 budget.

According to the BoG, it was left with no option but to support the government because its (the government's) access to International Capital Market was closed and the domestic market was also struggling.

In a statement issued on Thursday, February 9, 2023, the central bank posited that its action was not wrong since the Fiscal Responsibility Act, 2018 which was suspended by the Parliament of Ghana had not been reinstated.

“… it will be important to recall the circumstances under which Government of Ghana decided to seek IMF support. 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.

“With the above, the policy choices were not that of business as usual but rather a more challenged conduct of macroeconomic policy in the context of crisis.

"The government needed to finance critical expenditures for which the 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,” parts of the statement read.

"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 crises 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," it added.

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