Economic Issues

We printed ¢44.5 billion for the govt to avoid external and domestic debt default – BOG

We printed ¢44.5 billion for the govt to avoid external and domestic debt default – BOG

Feb 10, 2023 9:50 AM

The Bank of Ghana (BOG) has justified its funding support to the 2022 budget presented by the New Patriotic Party (NPP) government.

Ernest Addison, Governor of the Bank of Ghana

According to the BOG, the support of ¢44.5 billion to the government avoided external and domestic debt default in 2022.

In a statement copied to the press, the Bank of Ghana said the support was for critical imports to keep the economy on a stable path.

“It will be important to recall the circumstances under which the Government of Ghana decided to seek IMF support. Ghana had lost access to the International Capital Market, and domestic revenue was significantly underperforming and not realized, pushing the state of government finances into near external and domestic default.”

“With the above, the policy choices were not that of business as usual but rather a more challenged conduct of macroeconomic policy in the context of crisis. The government needed to finance critical expenditures for which Bank of Ghana needed to provide the necessary financing to avert a disorderly default of both servicing for domestic and external debt including financing critical imports to keep the economy on the stable path,” parts of the statement read.

“It must be recognized 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 crisis management tool used in dealing with the difficulties of 2022,” it said.

BoG governor, Dr. Ernest Addison

The BoG also said that the Parliament of Ghana was aware that it was financing the budget of the government.

“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 by GH¢44.5 billion,” it added

The statement by the BoG comes after it was heavily criticized by some Ghanaians after a Bloomberg report indicated that it printed GH¢41.9 billion for the government in 2022.

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