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Ignore Adongo's claims, He Provided Inaccurate Data - BoG

According to the Bank of Ghana (BoG), Isaac Adongo, the member of parliament representing Bolgatanga Central, made baseless accusations in his remarks on Governor Ernest Adison.

Isaac Adongo allegedly gave fake data that was made up without basis, according to the apex bank.

The Bank of Ghana stated that the claims made by him are intended to cast doubt on the BoG's and its management's hard-won reputation for credibility.

"The claims on government represent the stock of debt held by the Bank of Ghana and reflect accumulated claims for over twenty years, including legacy assets like the Telecom Malaysia Bonds issued in relation to the privatization of Ghana Telecom and Tema Oil Refinery Bonds," the BoG stated in a statement on Friday, November 11, 2022. The claims on Government stock position were worth GHC 34.1 billion at the end of December 2020, including the GHC 10 billion Covid-19 bond that the Bank of Ghana had bought.

“It would be recalled that in 2020, a request was made by the Government, through the Minister of Finance, to suspend the Fiscal Responsibility Act due to the Covid-19 pandemic. This was approved by Parliament together with the trigger of Section 30 of the Bank of Ghana Act, 2002 (Act 612) as amended, and paved the way for the Government to issue a Covid-19 Bond which was purchased by the Bank of Ghana at the policy rate, with moratorium of two years.

“At the end of December 2021, claims on Government rose to GH¢34.8 billion, and have recently risen further to GH¢40.2 billion at the end of October 2022, reflecting an increase of GH¢5.3 billion in 2022, which was the result of pre-mature unwinding of positions held by some banks.”

Regarding claims that the Bank of Ghana (BoG) has received loans from the International Monetary Fund (IMF) for further lending to the government, the BoG stated that "IMF instruments and resources have been redesigned to provide budget support rather than balance of payments support, including recent resources from the RCF program with Ghana and the RCF that was provided during the Covid-19 pandemic, and are therefore on-lent to the government.

“These are denominated in US dollars and revalued in line with exchange rate changes. From the table, these claims have increased by an amount of GH¢17.8 billion from beginning of the year to October 2022. This reflects a revaluation of these claims in the Bank of Ghana’s books to account for exchange rate developments. This figure does not reflect Bank of Ghana’s lending to Government but rather resources from the IMF that were required to be passed on to Government in line with approvals by the IMF Board. And the increase in the amount in 2022 does not reflect new cash transactions but rather merely a book-entry figure, driven in large part, by the depreciation of the currency.”

"Honorable Adongo also raised the concern that the Bank of Ghana has illegally borrowed US$7 billion through bridge financing, swaps, repurchase agreements, etc. and is consequently seeking funds to refinance this amount," the central bank stated.

Swaps, repurchase agreements, and sales and buybacks are legal business practices carried out by all Central Banks for efficient management of foreign exchange reserves. These tools have been used by the Bank of Ghana since 2011 for managing foreign exchange liquidity. As part of its treasury and reserve management duties, it is a crucial tool for managing foreign exchange by all central banks. Due to the recent global developments, financing circumstances have become tight, and these swaps have provided the economy with a sizable amount of foreign exchange liquidity.

“The total outstanding Swaps, Repurchase Agreements and sale and buy back transactions stood at US$2.4 billion at end October 2022, of which only US$720 million is expected to mature by the close of the year. We wish to assure the public that the Bank of Ghana is a reputable institution, which is professional with high standards. We have been recognised and awarded internationally on this score and all operations and policy decisions of the Bank are conducted with a high sense of duty and integrity to the best interest of the economy.”

Mr. Adongo charged that the governor of the BoG gave the government a sum of 70 billion in violation of the law in order to pay off matured obligations.

Dr. Addison received notice that the Finance Committee's Deputy Ranking Member intended to sue her.

On Tuesday, November 8, he stated, "Ask yourself why the same taxes that we placed on petroleum products two years ago to give a liter of 4. 50 pesewas." He was speaking at a press conference in Parliament.

“So essentially, now the problem is not even about the taxes, it is about the exchange rate. Who is supposed to manage the exchange rate? It is the Governor of the central bank Dr Addison.”

He added “Another big problem we have now is inflation. The Bank of Ghana manages the inflationary target framework whiles the Ghana Statistical Service reports actually but the man who is in charge of managing our inflation targeting framework and ensuring that inflation expectations are anchored, is the Governor of the Central Bank.

“The inflationary targeting framework within the confines of the Bank of Ghana provided very strict rules on what we call fiscal governance over monetary policy, in other words there are strict rules on the government of Ghana can borrow from the Bank of Ghana.

The BoG should never have lent more than 5% of the prior revenue cumulatively at any moment, according to those constrained criteria, which are very explicit. If you take into account the revenue from the prior year, the government is not even able to borrow five million Cedis from the BoG.

However, by the end of 2021, Dr. Addison would have unlawfully lent the government GH 35 billion, and by May of this year, he will have added GH 22 billion more when the Minister visited for the mid-year review. We are currently looking at the Government of Ghana illegally borrowing more than GHC7 billion from the BoG as we speak. Dr. Addison has been financing the government and paying maturing debt obligations that the government cannot find on the domestic market.

"If you have a corrupt government, like Dr. Bawumia and Akufo-Addo, and you pump GHC70 billion into the economy that does not belong to the economy, they steal them and they put them in their rooms beneath their beds.

"Under the current conditions, dollars, not cedis, are the ideal form of money storage. Therefore, what is pursuing the dollar is Dr. Addison's GHC70 billion, which are now in the residences and beds of government officials.

How is Dr. Addison still serving as Central Bank Governor? I urgently encourage Dr. Addison to leave the BoG and give Ghana an opportunity to fix the situation. By the end of the third meeting of the second sitting of the eighth Parliament, if he has not complied with his obligation to parliament for us to exercise our oversight role, I will sue him and I will go to court, I have instructed my lawyers to serve him notice and remind him once more of a letter I served him.

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Adongo Bank of Ghana Bolgatanga Central Ernest Adison Isaac Adongo


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