An Economist, Dr. Ebo Turkson, has backed Government’s moves to secure GHS10 billion domestic financing from the Bank of Ghana (BoG).
This was after the Finance Minister, Ken Ofori-Atta, on Thursday presented a report to Parliament activating the Central Bank’s financing plan for the Government.
This development has already been met with some suspicion from the Minority caucus in Parliament.
It fears the funds are merely to fund the governing party’s 2020 re-election bid.
The Minority also threatened to cause the BoG Governor to be summoned in Parliament for breaching the Bank of Ghana Act in respect of financing government expenditure.
But Dr. Turkson argued that such a move is not warranted given the circumstances of the pandemic.
“These are not normal times and so far as the government has clearly indicated a huge gap, I don’t see the reason why we should hide behind the law and say this is illegal and this shouldn’t go ahead,” he told Citi News.
Dr. Ebo Turkson also countered the fears that the funds will be used for campaigning saying the government is already being guided by an already approved budget.
“The government’s budget has been debated and approval has been given for spending. I am not too sure what they [the Minority MPs] mean by the government is going to use it for politics.”
He, however, added that the utilisation of the funds “may come with some political benefits to the incumbent but that has been so in every election year”.
GHS5.5 billion disbursed
The BoG has already advanced GHs 5.5 billion to the government in May 2020 to meet its financial obligations.
The GHS 5.5 billion first instalment of the bond was released on May 15, 2020.
By this, the BoG has set aside a Memorandum of Understanding with the IMF which bars it from financing the government’s budget which had been the case in previous years.
The additional GHS 4.5 billion cedis will be provided through the purchase of government assets.
Other concerns from Minority
The Minority also held that the support from the BoG could further increase the levels of inflation in the country.
“As we speak, they [the BoG] have printed GHS5.5 billion for government and the Governor sounded as part of the Monetary Policy Committee meeting that they are going to even print more. Do you know what it means? It is inflation and inflation steals from you and me,” the Ranking Member on the Finance Committee, Cassiel Ato Forson, said.
“Parliament will not sit aloof for him to disregard the acts of this country. I will personally write to the Chairman of the Finance Committee to hold the Governor of the Central Bank to appear before Parliament and give us reasons why he has decided to disregard the Act of Parliament and do things contrary to what is in law at his own will. That should not be allowed to happen,” he added.
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