Kwaku Kwarteng, Member of Parliament (MP) for Obuasi, says government should boldly declare that it has stopped all forms of borrowing instead of disclosing that it has not borrowed from the Central Bank since the beginning of the year.
The legislator, who spoke to BUSINESS GUIDE in a telephone interview yesterday, said President John Mahama’s recently pronouncement on the matter is not newsworthy because the IMF, under its three-year Extended Credit Facility agreement with Government, banned the latter from taking currency printed by the Bank of Ghana (BoG) to fund its operations.
He said such printing of money by BoG for Government usually gave rise to inflation and depreciation of the local currency.
“Government is entitled to instructing BoG to print money for it to fund its activities but under the IMF agreement, it has been asked not to do so. So, the President’s admission is no news. It doesn’t mean anything because Parliament is still approving some loans for it,” the MP said.
He stated that government had nonetheless been borrowing from both domestic and foreign investors.
“What matters and is newsworthy is that the President would come out and say that it has stopped borrowing from both internal and outside sources.
“Another issue of concern is whether government is living within its means. It should therefore come out with the data on its expenditure for Ghanaians to know.”
Government’s aggregate borrowing amount for the first half of 2016 is GH¢30,730.00 million out of which forecast maturities represent GH¢27,779.00 million and net issuance GH¢2,951.00 million.
President Mahama said the operations of his administration since the year began had been financed from revenue generated through taxes and other means, which he said indicated that the economy was resilient.
He said even though government had a borrowing limit of up to 10 percent of the budget in 2015, his administration had opted not to utilise that window.
“Under the extended credit facility of the International Monetary Fund (IMF), this year we started a zero central bank financing. So, every expenditure by government is not borrowed from the Central Bank,” he said on Volta Star radio in the Volta region on Thursday, April 21, 2016 during his ‘Accounting to the People’ tour.
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