<<Print>>

President John Mahama has revealed that government has stopped borrowing from the Central Bank (Bank of Ghana) to settle expenditures.

According to him, government under the Extended Credit Facility of the International Monetary Fund, is banned from taking monies from the Central Bank.

President John Mahama noted that a lot of economists don’t know that under the extended credit facility of the International Monetary Fund, (IMF) beginning this year. government has started zero Central Bank financing.

He said every expenditure that government is making is not from monies borrowed from the Bank of Ghana.

“In the past government had a 10% ceiling with which to borrow from the Central Bank, so if there was no liquidity then we went to the Central Bank and we could borrow up to 10% of the previous year’s budget from the Central Bank. Indeed we used to go beyond 10%, by the end of the year you ought to have been above 10% and so you could go to 20% but by the end of the year, you balance your books and make sure you are not above 10%.

“As I speak the agreement we have under the External Credit Facility is zero Central Bank financing. So with every payment and expenditure we are making this economy is more resilient and more disciplined because we are using the revenues we are collecting, and not going to the Central Bank and borrowing money from the Central Bank.

President Mahama further said “And so I just want economists to take note of that, so when you are talking about an economy in crisis…an economy which is self reliant and not going to the Central Bank and taking money is more resilient than an economy that goes to the Central Bank to take monies to pay salaries, and so we’re doing zero Central Bank financing.”

President Mahama was speaking on Volta Star Radio as part of his ‘Accounting to the people tour’ in the Volta Region.