The dean of accounting and finance at the University of Professional Studies, Accra (UPSA), Professor Isaac Boadi, has described as false John Dramani Mahama’s claim that the Akufo-Addo government has borrowed GHC42 billion from the Bank of Ghana.
Taking his turn to address the audience at the ABC News Economic Symposium at Koforidua Technical University on Tuesday (5 November 2024), Professor Boadi responded to the debt-related query John Mahama put to Dr Mahamudu Bawumia in the NDC’s economy-related Five Questions, and said that the opposition presidential candidate got his information wrong.
“The former president asked Dr Bawumia why the government borrowed more than GHC42 billion from the Bank of Ghana, causing the central bank to post its heaviest loss of GHC60 billion.
“The former president is not being truthful with his question. This government has not borrowed any GHC42 billion from the Bank of Ghana,” Professor Boadi said.
“The GHC42 billion represents monies the Bank of Ghana has given to the various governments or administrations since 2014. In the year 2022, the support given to the government by the Bank of Ghana stood at GHC5.328 billion, and not the GHC42 billion the former president is bandying about,” he said.
Critical expenditures
Professor Boadi explained that the Bank of Ghana gave the government GHC5.328 billion to support the national treasury through the severe liquidity crisis in which the economy then found itself, a crisis that was not homegrown, but largely imported.
“Ghana had lost access to the international capital markets,” Boadi recalled. “Domestic revenue was also underperforming. The government needed to finance critical expenditures.
“To avert a disorderly default, including financing critical imports to keep the economy on the stable path, Bank of Ghana needed to provide the necessary financing,” he said.
Professor Boadi gave the following as Bank of Ghana’s claims on the government as at December 2022:
- Bank of Ghana’s purchase of treasury bonds from banks to provide them with liquidity to enable them to meet their obligations to customers: GHC7.2 billion.
- Facilities granted by the International Monetary Fund for onward lending to the government: GHC8.9 billion
- Overdraft extended to the government, meant solely for the purpose of addressing auction shortfalls and paying customers whose bonds had matured and which the government did not have adequate resources to cover: GHC37.9 billion
- Increase in government deposit liabilities at the Bank of Ghana recorded in the course of 2022: GHC9.5 billion
- On a net basis, therefore, putting together all claims and netting off all deposit liabilities, these transactions resulted in an increase in Bank of Ghana’s net claims to the government, amounting to GHC44.5 billion.
Professor Boadi called on Ghanaian voters not to fall for the untruths of the NDC’s presidential candidate as the 2024 election approaches.
Reporting by Wilberforce Asare in Accra
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