• About
  • Advertise
  • Privacy Policy
  • Contact
Monday, October 20, 2025
  • Login
The Vaultz News
  • Top Stories
  • News
    • General News
    • Education
    • Health
    • Opinions
  • Economics
    • Economy
    • Finance
      • Banking
      • Insurance
      • Pension
    • Securities/Markets
  • Business
    • Agribusiness
    • Vaultz Business
    • Extractives/Energy
    • Real Estate
  • World
    • Africa
    • America
    • Europe
    • UK
    • USA
    • Asia
    • Around the Globe
  • Innovation
    • Technology
    • Wheels
  • Entertainment
  • 20MOBPL2DNew
  • Jobs & Scholarships
    • Job Vacancies
    • Scholarships
No Result
View All Result
The Vaultz News
  • Top Stories
  • News
    • General News
    • Education
    • Health
    • Opinions
  • Economics
    • Economy
    • Finance
      • Banking
      • Insurance
      • Pension
    • Securities/Markets
  • Business
    • Agribusiness
    • Vaultz Business
    • Extractives/Energy
    • Real Estate
  • World
    • Africa
    • America
    • Europe
    • UK
    • USA
    • Asia
    • Around the Globe
  • Innovation
    • Technology
    • Wheels
  • Entertainment
  • 20MOBPL2DNew
  • Jobs & Scholarships
    • Job Vacancies
    • Scholarships
No Result
View All Result
The Vaultz News
No Result
View All Result

IMF’s Effort To Terminate Monetary Financing To Cause Repercussions In Ghana

M.Cby M.C
June 19, 2023
Reading Time: 4 mins read
M.Cby M.C
in Finance, Sub Top Stories, Sub Top Stories1
0
Ghana Cedi Crowned Africa’s Best-Performing Currency in 2025 — World Bank Applauds Strong Policy Discipline

Ghana Cedis note

The Government of Ghana appears to be taking advantage of the Central Bank of Ghana’s well-known historic role as the “Lender of Last Resort” to banks and the government, through monetary financing.

The Central bank, through its monetary financing, creates money and makes contributions to financing government expenditure, whether directly from the central bank to government, or indirectly, in that the central bank purchases government bonds on the open market.

The Government access funds from the Bank of Ghana only after it has exhausted all other options of borrowing, including international market borrowing.

RelatedPosts

Countdown to GH¢100K Grand Prize Begins as Fidelity’s ‘Sika Bumm Reloaded’ Heats Up

Fitch Upgrades Ghana’s 2025 Growth Forecast to 4.9% Amid Inflation Cooldown and Cedi Strength

GSE Ends September with a Bang — Composite Index Climbs Past 8,000 Points in Spectacular Market Comeback

However, the BoG appears to be handing the government excessive amounts of money, which will ultimately have a detrimental effect on the entire nation in the future.

As a result, the IMF in its Conditionalities (Prior Action 4) called for the signing of a Memorandum of Understanding (MoU) between the BoG and the Ministry of Finance to eliminate Central bank financing. This move might bring a lot of implications should Bank of Ghana refuse to fund the government of Ghana as it goes through economic hurdles.

The total shift from monetary financing and the emergence of new sources of funding for the government might create uncertainty in the financial and economic environment. This is because changes in borrowing practices may impact interest rates, credit availability, and the state of the economy as a whole. These uncertainties may provide difficulties for firms, investment choices, and general economic expansion, thereby harming employment prospects and living standards for residents.

ADVERTISEMENT

Not limited to that, getting rid of Central Bank financing will require the government of Ghana to look out for other sources of financing, such as domestic and international markets. Government spending priorities and allocations may be affected by the availability and conditions of these sources. Public spending patterns may alter, which would have an impact on how basic services are provided and how infrastructure is built, and in the long run affecting the standard of lives of the citizens.

BoG governor Dr Ernest Addison with President Akufo Addo
Governor of the Central Bank of Ghana, Dr. Ernest Addison (on the left), President of Ghana, His Excellency Nana Akufo Addo (on the right)

More so, the elimination from monetary financing may require the government to undertake short-term changes to its fiscal and monetary policies. Such adjustments may have an impact on borrowing costs, investment choices, and general financial stability, which may affect both people, businesses and corporations operating in the country.

Putting in measures to ensure independence of the central bank by reducing fiscal dominance is a good means of ensuring BoG operates without interference, however, the process of coordinating monetary policy may present difficulties and potential conflicts of interest. The ability of the central bank to efficiently administer monetary policy may be hampered which may have an impact on the general stability of the economy and public confidence in the financial system.

Furthermore, total shift away from monetary financing may force the government to depend more on foreign borrowing or domestic debt markets. Depending on the terms and conditions of these financing sources, there may be implications for the country’s debt burden and debt service obligations. Higher debt levels may limit government resources and the ability to make investments and social programs that directly benefit individuals.

BoG, Government Urged To Take Effective Measures In The Elimination of Monetary Financing

Central bank financing has been a political issue, with Hon. Cassiel Ato Forson, an opposition MP in Ghana’s evenly split parliament, alleging last year that the central bank printed 22bn cedis ($1.9bn) to fund the budget without parliamentary approval. However, the central bank denied the allegation.

Hon. Cassiel Ato Forson
Hon. Cassiel Ato Forson

The IMF in its conditionalities imposed a prior action on Ghana that calls for the Bank of Ghana and the Ministry of Finance to sign a Memorandum of Understanding (MoU). This condition aims to eliminate the practice of monetary financing of the Central Government.

According to IMF’s information, Ghana was in a scenario where the central government relied on monetary funding, or direct borrowing from the central bank. The economy, it stated, may suffer as a result of this behavior, which may also erode the independence of the central bank and increase inflationary pressures

Nonetheless, it is important for Ghana to carefully handle the shift away from monetary financing, reduce short-term disruptions, and make sure that fiscal and monetary policies are coordinated effectively.

To limit any negative effects on citizens and encourage sustainable economic development, it will be crucial to put policies into place that maintain price stability, boost investor confidence, protect the delivery of critical services and promote sustainable economic development.

Read also: IMF Deal Faces Imminent Danger Due to Over Reliance on Taxes for Revenue- IFS

Tags: Bank of Ghanacentral bank financing/ monetary financingHon. Cassiel Ato ForsonInternational Monetary FundPublic spending
Please login to join discussion
Previous Post

Netanyahu Claims Israel Will Proceed With Judicial Overhaul Plan

Next Post

Securing IMF Deal Not An End To Current Challenges– Ofori-Atta

Subscription Form

Related Posts

Countdown to GH¢100K Grand Prize Begins as Fidelity’s ‘Sika Bumm Reloaded’ Heats Up
Banking

Countdown to GH¢100K Grand Prize Begins as Fidelity’s ‘Sika Bumm Reloaded’ Heats Up

October 20, 2025
Fitch Upgrades Ghana’s 2025 Growth Forecast to 4.9% Amid Inflation Cooldown and Cedi Strength
Economy

Fitch Upgrades Ghana’s 2025 Growth Forecast to 4.9% Amid Inflation Cooldown and Cedi Strength

October 20, 2025
GSE Ends September with a Bang — Composite Index Climbs Past 8,000 Points in Spectacular Market Comeback
Securities/Markets

GSE Ends September with a Bang — Composite Index Climbs Past 8,000 Points in Spectacular Market Comeback

October 20, 2025
Zenith Bank Ghana at 20: CEO Henry Onwuzurigbo Pledges New Era of Innovation and Excellence
Banking

Zenith Bank Ghana at 20: CEO Henry Onwuzurigbo Pledges New Era of Innovation and Excellence

October 19, 2025
BoG Ends UBA’s FX Suspension After Satisfactory Remedial Measures
Banking

BoG Ends UBA’s FX Suspension After Satisfactory Remedial Measures

October 18, 2025
Ghana Stock Exchange Ends Week Strong As GSE Financial Stocks Surge 2.9% in a Week
Securities/Markets

Ghana Stock Exchange Ends Week Strong As GSE Financial Stocks Surge 2.9% in a Week

October 18, 2025
The Administrator of the Ghana Medical Trust Fund, Ms. Obuobia Darko Opoku, Leading the delegation
General News

Ghana Medical Trust Fund Kickstart Phase Two of Hospital Needs Assessment Tour

by evansjrOctober 20, 2025
NPP Presidential Primaries; Kennedy Agyapong On A Countdown To A Showdown
General News

Kennedy Agyapong Leading NPP Presidential Primaries Race with 44.11% Support — Poll

by evansjrOctober 20, 2025
Countdown to GH¢100K Grand Prize Begins as Fidelity’s ‘Sika Bumm Reloaded’ Heats Up
Banking

Countdown to GH¢100K Grand Prize Begins as Fidelity’s ‘Sika Bumm Reloaded’ Heats Up

by M.COctober 20, 2025
Rural Electrification
Extractives/Energy

IEA Report: Africa Needs $150 Billion to Achieve Universal Electricity Access by 2035 

by Prince AgyapongOctober 20, 2025
Galamsey Threat Puts Ghana’s Water Security at Breaking Point
General News

Galamsey Threat Puts Ghana’s Water Security at Breaking Point

by Silas Kafui AssemOctober 20, 2025
Azumah Resources
Extractives/Energy

Azumah Resources Ghana Transitions to Full Ghanaian Ownership 

by Prince AgyapongOctober 20, 2025
The Administrator of the Ghana Medical Trust Fund, Ms. Obuobia Darko Opoku, Leading the delegation
NPP Presidential Primaries; Kennedy Agyapong On A Countdown To A Showdown
Countdown to GH¢100K Grand Prize Begins as Fidelity’s ‘Sika Bumm Reloaded’ Heats Up
Rural Electrification
Galamsey Threat Puts Ghana’s Water Security at Breaking Point
Azumah Resources

Recent News

The Administrator of the Ghana Medical Trust Fund, Ms. Obuobia Darko Opoku, Leading the delegation

Ghana Medical Trust Fund Kickstart Phase Two of Hospital Needs Assessment Tour

October 20, 2025
NPP Presidential Primaries; Kennedy Agyapong On A Countdown To A Showdown

Kennedy Agyapong Leading NPP Presidential Primaries Race with 44.11% Support — Poll

October 20, 2025
Countdown to GH¢100K Grand Prize Begins as Fidelity’s ‘Sika Bumm Reloaded’ Heats Up

Countdown to GH¢100K Grand Prize Begins as Fidelity’s ‘Sika Bumm Reloaded’ Heats Up

October 20, 2025
Rural Electrification

IEA Report: Africa Needs $150 Billion to Achieve Universal Electricity Access by 2035 

October 20, 2025
Galamsey Threat Puts Ghana’s Water Security at Breaking Point

Galamsey Threat Puts Ghana’s Water Security at Breaking Point

October 20, 2025
Azumah Resources

Azumah Resources Ghana Transitions to Full Ghanaian Ownership 

October 20, 2025
The Vaultz News

Copyright © 2025 The Vaultz News. All rights reserved.

Navigate Site

  • About
  • Advertise
  • Privacy Policy
  • Contact

Follow Us

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In
No Result
View All Result
  • Top Stories
  • News
    • General News
    • Education
    • Health
    • Opinions
  • Economics
    • Economy
    • Finance
      • Banking
      • Insurance
      • Pension
    • Securities/Markets
  • Business
    • Agribusiness
    • Vaultz Business
    • Extractives/Energy
    • Real Estate
  • World
    • Africa
    • America
    • Europe
    • UK
    • USA
    • Asia
    • Around the Globe
  • Innovation
    • Technology
    • Wheels
  • Entertainment
  • 20MOBPL2D
  • Jobs & Scholarships
    • Job Vacancies
    • Scholarships

Copyright © 2025 The Vaultz News. All rights reserved.

Discover the Details behind the story

Get an in-depth analysis of the news from our top editors

Enter your email address