Member of Parliament for South Tongu, Kobena Mensah Woyome, is proposing the decoupling of the debt management function from the Ministry of Finance, to prevent debt pile-ups. In place of this, he proposes independent managers of Ghana’s Debt.
He indicated that it seems the government instead of borrowing to fund projects and to pay back the loans with interest, it borrows rather for recurrent expenditure and other activities, that do not guarantee the country’s ability to repay. This is due to a lack of openness on the part of managers of the debt, describing it as “recklessness”.
According to him, the proposed independent debt manager of the country’s debt will advise government on loan acquisition decisions, including how to borrow, what to borrow and at what rate and how to spend borrowings. This will, however, ensure efficiency so that the country does not find itself in a huge debt situation in the future.
Mr. Woyome, who is also the Ranking Member on the Sports, Youth and Culture committee, made the proposal on the floor of parliament when he took his turn in support of a motion, to thank President Akuffo-Addo for delivering a message of the State of the Nation, in accordance with article 67 of the 1992 constitution.
Trustworthiness Of BOG
Moreover, the South Tongu lawmaker, also questioned the Bank of Ghana for failing on its policy rate management function, which has led to the high inflationary rates the country is witnessing in recent times.
He criticized the central bank by describing it as ‘reckless’ and engaging in an ‘illegality’, by dolling out of printed money to government, beyond the allowable five percent threshold, which has brought the country to its current status.
Mr. Woyome backed his claim, with fact and figures and explained that the central bank is expected to use its policy rate to control inflation, by mobbing excess liquidity from the system but it ends up using the backdoor in releasing more money to government to spend. Thereby, defeating the purpose of the policy rate announcements.
“And the issue is this, what are they trying to achieve? You are trying to use the monetary policy to mop excess liquidity from the system because you want to control inflation, but at the same time, using the back door and releasing more money illegally to the government.
“Which is going to carry on more expenditure, by way of introducing more money into the system, defeating the very purpose of the monetary policy, that was actually announced.”
Kobena Mensah Woyome
The Ranking Member, therefore urged for parliament to keep a watchful eye over the central bank because it has not been sincere.
“And so Mr. Speaker if you watch carefully, figures such as in 2020, they (referring to BOG) funded government to the tune of Ghc 10 billion, that is beyond the five percent threshold that ought to be allowed, which is five percent of the previous year’s revenue that was collected. In 2021, they spent or printed in excess of Ghc 35 billion in terms of funding, for government then at the same time in 2022, Ghc 50 billion was used to fund government.
“And then also in this year, so far, about Ghc 40 billion, and you look at all these, you are funding government illegally but at the same time, announcing policy rate which is intended to be controlling the money circulation in the system. So, you are actually giving and then taking and then making life difficult for a lot of people, operators in the economy, businesses alike and so on, in the Ghanaian economy.”
Kobena Mensah Woyome
He urged the President to allow independent state institutions mandated to investigate allegations of wrongdoing against his appointees, with regards to COVID-19 funds to do their work and establish the facts, whiles urging him to desist from praising himself and clearing them of wrongdoings.
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