Mahama didn’t borrow from BoG in 2016 – Adongo counters Starr FM Fact Checker

The Member of Parliament for Bolgatanga Central, Isaac Adongo has challenged claims that the erstwhile NDC administration borrowed money to finance the 2016 budget.

The flagbearer of the NDC John Mahama at the launch of the party’s 2020 manifesto delivered a speech justifying his reelection bid with his track record of economic performance. The former president then claimed that his administration managed the 2016 budget with zero borrowing from the Central Bank.

However, the Fact Checker team at Starr FM had concluded after consideration of the expenditure of the government that the claim was factually incorrect.

“To verify this we checked the 2016 Annual Debt Management Report for the year 2016 as was submitted to parliament in fulfillment of requirements of Section 72 of the Public Financial Management Act 2016 (Act 921).

2016 ANNUAL DEBT MANAGEMENT REPORT

“Section 2.2, which covers government borrowing and financing operations, shows that the John Mahama administration net borrowed 11.2 billion cedis on the domestic market to help manage the budget deficit. Out of that amount, government net borrowed 2.39 billion cedis from the Bank of Ghana. The figure in this report was captured as the provisional figure for end year 2016, which means an estimated figure,” the team concluded.

However, reacting to the report on Twitter, the lawmaker said: “JM was correct when he said we did zero financing from BOG. Though the BOG Act as amended sets the limit at 5%, the MOU between BOG and MOF set it at zero and was religiously complied with. Don’t confuse draw down of Government balances at BOG with BOG financing of Govt. #fact check”.

Also commenting on the report, former deputy Finance Minister Ato Forson wrote on twitter :"The so-called Factcheck below fails to realise that the GHC2.391 billion was not BoG financing. In fact, it was not borrowing at all! It was Government drawing down on its own deposits with the central bank. JM is 100% correct”.

JM was correct when he said we did zero financing from BOG. Though the BOG Act as amended sets the limit at 5%, the MOU between BOG and MOF set it at zero and was religiously complied with. Don't confuse draw down of Govt balances at BOG with BOG financing of Govt. #fact check .

— Isaac Adongo (@IsaacAdongo6) September 11, 2020