Gov’t to Borrow GH¢1.26 billion from Banking Sector

The Minister of Finance, Hon. Ken Ofori-Atta seeks the approval of Parliament to borrow about GH¢1.26 Billion from the Banking Sector.

The proposed amount of GH¢1.26 Billion is to assist the government in financing its activities for the first quarter of 2021.

Hon. Ken Ofori-Atta indicated in the 2021 Expenditure in Advance of Appropriation, presented to Parliament that, the government plans to source funding through both domestic and foreign means.

A breakdown of the projected domestic financing for the first three months of 2021 shows that out of a total amount of GH¢3.7 billion estimated, approximately GH¢2.3 billion are going to be obtained from non-bank sources. This is followed by GH 1.26 billion from commercial banks and then GH¢138.8 million from Ghana Stabilisation & Heritage Funds. 

The government will not resort to the Bank of Ghana for funding, the Finance Minister added.

A proposed sum of GH¢32.3 billion is going to be borrowed, from foreign sources, of which GH¢31.3 billion is supposed to come from sovereign bonds, and the remaining GH¢1 billion is to be sourced, from project loans.

The presentation of an advance appropriation in the last quarter of the year, as is the case when it is an election year, is done instead of a conventional budget presentation in November.

Request for GH¢27.4 billion

The Minister of Finance also entreated the august house to approve a sum of GH¢27.4 billion to support government expenditure on services until the expiration of three months from the beginning of the 2021 Financial Year.

The GH¢27.4 billion is to assist the government in carrying out its operations, such as “Compensation of Employees, ex gratia awards, Interest and Amortization payments, transfers to Statutory Funds, critical programmes and Goods and Services, and Capex allocations of MDAs,” Hon. Ken Ofori-Atta mentioned.

Financial System

Throwing more light on the financial system, the Minister of Finance, intimated that it remains strong and will ease private sector access to credit and investment.

Hon. Ken Ofori-Atta, indicated further that the government established the “Ghana Incentive-based Risk Sharing System for Agricultural Lending (GIRSAL) to facilitate lending to the Agricultural sector, the Ghana Amalgamated Trust (GAT) to support indigenous participation in the banking sector, the Ghana Commodity Exchange (GCX) to modernize Agricultural transactions and provide security for our farmers, the Ghana Deposit Scheme (GDS) to protect depositors’”.

“We have also established a National Development Bank which already has commitments of over 500 million USD as a wholesale bank to further support these financial institutions,” the Finance Minister opined.