BoG cannot justify scale of lending to government – IEA Director of Research

The Director of Research at the Institute of Economic Affairs (IEA), Dr. John Kwakye, has stated that the Bank of Ghana’s justification of its financing of government budget in 2022 cannot justify the scale of lending to the government.

According to him, the Central Bank can provide temporary advances to government but should be repaid within three months per the BoG’s Act.

The Bank of Ghana had justified financing of the government’s 2022 budget with about ¢44.5 billion.

It said in a statement that financing of government was part of a crisis management tool used in dealing with the difficulties of 2022.

“It must be recognised that the ongoing debt operations are part of the corrective measures designed to address the financing problem of the budget. Bank of Ghana financing was part of a crises management tool used in dealing with the difficulties of 2022”.

But in a tweet, Dr. Kwakye said lending ¢44 billion far exceeded the 3.5 billion celining.

“Lending ¢44 billion in 2022 far exceeded the ¢3.5 billion ceiling”.

“BoG’s rejoinder cannot justify the scale of their lending to government. The Bank can provide temporary advances to government. But they should be limited and repayable within three months per the Bank’s Act”, it added.