The Ministry of Finance has rejected claims by the minority in Parliament that disbursements from the International Monetary Fund (IMF) to Ghana require Parliamentary approval.
According to the Ministry, “the IMF loan to the Bank of Ghana does not constitute Government borrowing within the ambit of Art. 181 of the Constitution and thus “the borrowing would, therefore, not require Parliamentary approval under Art. 181.”
The Minority in Parliament raised concerns about Ghana’s three-year Extended Credit Facility programme with the IMF.
They accused government of violating the 1992 Constitution by failing to seek parliamentary approval before receiving the credit facilityl.
The Minority Spokesperson on Finance, Dr Anthony Akoto Osei and legal practitioner, Afenyo Markin citing Article 181 (3) of the constitution argued that “no loan shall be raised by the government on behalf of itself or any other public institution or authority otherwise than by or under the authority of an Act of Parliament,” President Mahama violated the law and approved the deal without recourse to Parliament.
But the Ministry in a statement signed by its deputy Minister, Cassiel Ato Forson explained that the credit facility does not in any way breach the Constitution.
“The Ministry of Finance disagrees with the Minority’s views on the matter because the IMF loan in question, which is approved by the IMF’s Board based on a Letter of Intent signed by the Minister of Finance and the Governor of the Bank of Ghana (the “Bank”) is disbursed directly to the Bank by the IMF, as balance of payments support, and is used accordingly by the Bank, without supervision or interference by the Minister for Finance or any other governmental authority.”
“The Minister signs the Letter of Intent together with the Governor of the Bank of Ghana because some of the policies underpinning the IMF Programme are policies to be implemented by Government,” it added.
Article 181(3) of the Constitution states: “No loan shall be raised by the Government on behalf of itself or any public institution or authority otherwise than by or under the authority of Act of Parliament.”
IMF loan not part of Ghana’ debt
The Ministry of Finance indicated that the current IMF credit facility will not add up to the government debt stock.
“It is worth noting that the IMF loan to the Bank of Ghana is not part of Government debt and the current Government debt levels exclude loans taken from the IMF. The IMF loan will not be serviced out of the Consolidated Fund or any other public fund, and therefore does not qualify to be a loan as defined in Art. 181 (6) of the Constitution, which defines a loan,” the statement added.
The IMF has subsequently, disbursed over $200 million out of a total of $918 million under the current bailout arrangement to Ghana.
They first released about $114 million and later, $116 million after assessing how Ghana was performing.
Source: citifmonline