We Will Resist The Finance Minister's Attempt To Sign A Memorandum Of understanding With The BoG for Negative Financing - Haruna Iddrisu

Haruna Iddrisu, leader of the minority
Members of the Minority in Parliament have stated that they will oppose the attempt by Finance Minister Ken Ofori-Atta to sign a Memorandum of Understanding (MoU) with the Bank of Ghana for zero government financing.

Haruna Iddrisu, a former minority leader and member of parliament for Tamale South, characterized the MoU between the Bank of Ghana and the Ministry of Finance as "laughable" for the country.

"A country that takes itself seriously must be governed in accordance with a legal framework that protects the State and its institutions. In accordance with the amended Bank of Ghana Act, the Bank of Ghana is in violation for having to overdraw and lend to the government in excess of what is permitted.

"But MoU, what is the weight of MoU within the parameters of the Ghanaian constitution and law?" he asked.

In an interview with Elton Brobbey of Joy News, the lawmaker stated that the Finance Minister must be present in Parliament for legislation on zero-percent government financing by the Bank of Ghana.

In light of this, he stated that anything short of legislation enacted by the legislature will not be accepted.

The International Monetary Fund is demanding, among other things, that the government enters into a legally binding agreement with the Bank of Ghana for the financing of no government programs.

According to the central bank, the bank provided over GH40 billion in support to the government in 2021, preventing the economy from collapsing.

On the margins of the IMF/World Bank meetings, Finance Minister Ken Ofori-Atta told JoyNews that the government has signed a Memorandum of Understanding (MoU) in compliance with the IMF order.

As it defends its decision to participate in the domestic debt exchange program, the Ghana Association of Banks asserts that its members will grant loans to only productive projects from now on.

This is despite the fact that participation has resulted in a grievous impairment of the institutions' assets, with some on the verge of insolvency.

John Awuah, chief executive officer of the Association, states that participation was required to prevent the economic collapse.

As a financial system, we took the position that certainty or some form of stability was of the utmost importance. Are we willing to sacrifice stability on the altar of ceaseless exertion for what?

"And if you've moved the date from September to January to February to March to April, and the economy is collapsing, you must operate within the economy. Obviously, if your certainty causes a significant disruption in economic performance, you will be possessing instruments that you refer to as bonds but that are essentially worthless. "This is why the industry has taken the position that it wants to be a part of the solution," he explained.

However, he acknowledges that this circumstance requires banks to exercise caution when extending loans to consumers.