The Member of Parliament for Bawku Central Constituency, Mahama Ayariga, has written to the International Monetary Fund (IMF) and the World Bank not to lend support to the Minister of Finance Ken Ofori-Atta’s move to set up a Ghana Financial Stability Fund (GFSF).

In a letter to the country representatives of the two global financial bodies, Mr. Ayariga described as unconstitutional and illegal the attempt by the Finance Minister to use mere guidelines and putting it under the administration of an illegal and unconstitutional body known as Ghana Amalgamated Trust Plc (GAT) based on opaque and legislatively unauthorized management and disbursement mechanisms.

Mahama Ayariga, MP for Bawku Central referred the letter to the Governor,-Bank of Ghana , Attorney-General and Minister for Justice, Speaker-Parliament of Ghana 4. President and Association of Bankers.

“It is a scheme with the potential to deprive private indigenous bank owners the ownership of their assets in these banks after his mismanagement of the financial sector has rendered these banks vulnerable.”

He furthered that the whole set-up has yet to be subjected to “parliamentary oversight and scrutiny”.

It referred to an August 22, 2023 publication of the Finance Ministry to establish GFSF to be funded by the government with the World Bank and the IMF as its major donors.

“In the said document, the MoFEP is indicating that it will seek to offload an amount of about $750 million to Ghana Amalgamated Trust (GAT) Ltd to be the main agency responsible for disbursing such funds,” parts of Mr Ayariga’s letter noted.

“On 3rd March 2022, as a member of the minority in Parliament, I brought an action at the Supreme Court of Ghana to challenge the legality of GAT and the fraudulent activities of GAT and its operations in the case of Mahama Ayariga v. Attorney General & Others (Suit No. J1/20/2022). The issue is currently pending.
“It is therefore strange that GAT and MoFEP, knowing well that the case is still pending in court will still want to undertake an illegality this time on a very large scale.”
Mahama Ayariga

Ghana Financial Stability Fund

According to Ayariga, the plan to create this fund through irregular and unauthorized means under the Ghana Amalgamated Trust Plc (GAT) is constitutionally questionable and could potentially undermine the rights of private indigenous bank owners in Ghana. This initiative lacks proper parliamentary oversight and transparent management and disbursement mechanisms.

The Ministry of Finance and Economic Planning’s publication on August 22, 2023, revealed the establishment of the GFSF, intended to receive funding from the Government of Ghana and the World Bank/IMF. However, this move has raised concerns, especially in light of the ongoing legal challenge questioning the legality of GAT and its operations, as highlighted in the case of Mahama Ayariga v. Attorney General & Others (Suit No. J1/20/2022).

Several key issues highlight the potential unconstitutionality of GAT and the associated GFSF initiative. Firstly, the structure of GAT appears designed to acquire vulnerable private banks, potentially denying their owners their rightful ownership. This circumvents the necessary parliamentary approval and transparency, violating constitutional principles and requirements for public corporations established through Acts of Parliament.

Moreover, the document titled “Operational Framework of the Ghana Financial Stability Fund (GFSF)” outlines the establishment of the fund through administrative guidelines, bypassing the legal procedures mandated by the Ghanaian Constitution. The reliance on opaque and unscrutinized mechanisms raises significant concerns about the legitimacy and accountability of the proposed financial arrangements.

Therefore, engagements on GFSF raises red flags under Articles 175, 176, 178, and 179 of the Constitution of Ghana, highlighting the need for transparent, legal, and constitutionally sound practices in establishing and managing public funds. Thus the MP contends that the involvement of the IMF and the World Bank in this initiative without proper adherence to legal protocols would raise serious constitutional concerns and compromise the integrity of their financial operations in Ghana.

It is essential to ensure that all financial activities comply with the constitutional framework to safeguard the integrity and transparency of public funds and prevent any potential abuse of power.

Mahama Ayariga thus emphatically urged the WB and the IMF to refrain from endorsing or participating in any financial operations that do not adhere to the established legal procedures and principles.

Compliance with the Constitution of Ghana is critical to upholding the rule of law and promoting responsible and accountable governance in the management of public funds.