Press spotlights position of IMF on financing of government by BoG

The report that the International Monetary Fund (IMF) supported the Bank of Ghana's financing of the government in 2022 as…

The report that the International Monetary Fund (IMF) supported the Bank of Ghana’s financing of the government in 2022 as a crisis management tool to help keep government machinery running and the economy together is one of the leading stories in the Ghanaian press on Friday.The Graphic reports that the International Monetary Fund (IMF) supported the Bank of Ghana’s financing of the government in 2022 as a crisis management tool to help keep government machinery running and the economy together, the central bank has said.

BoG said in a release issued today, Thursday that while the IMF and the central bank saw the lending to be “suboptimal,” “it was agreed that this temporary arrangement was needed.”

Consequently, it said in the statement responding to public commentary on BoG’s financing of the government in 2022 that it was inaccurate that the IMF came and uncovered the extent of the deficit financing.

Instead, it said the IMF team assessed it to be necessary but part of a comprehensive solution to be addressed in the government’s economic policies and programmes to be supported by the IMF.

The statement is signed by the Secretary of BoG, Ms Sandra Thompson.

BoG also explained that the crisis that the country found itself in last year meant that the central bank lending was critical “to avert a disorderly default of both servicing for domestic and external debt.”

It noted that the funding helped to finance critical imports to keep the economy on the stable path.

The bank said it was compelled to re-state its earlier assessments on the matter and address misinformation and inaccuracies while helping to anchor the discussions in the public domain.

The newspaper says that more than 500 delegates from 100 countries will converge on Accra in April this year for the 53rd World Trade Centres Association (WTCA) General Assembly.

The 53rd WTCA General Assembly, which will be held in Accra from April 23 to 28, will be the first to be hosted in Africa in the over 50-year history of the WTCA, a global network of 300 business organisations in more than 100 countries.

The global event is expected to be one of the biggest gatherings of business executives, investors, financial institutions, international trade organisations, policy makers and entrepreneurs on the African continent.

On the theme: “Towards African Economic Integration and Enhanced Global Presence”, the assembly will foster global collaborations among the various WTCs, as well as create trade and investment opportunities for businesses and countries.

At the media launch of the 53rd WTCA General Assembly in Accra last Wednesday, the Executive Chairman of the WTC, Accra, Togbe Afede XIV, said the event was a great opportunity for African countries to enhance economic partnerships among themselves and other countries.

He said it was unfortunate that in spite of the fact that Africa controlled about 60 per cent of the world’s arable land and 30 per cent of the known mineral deposits, the continent could only boast less than five per cent of global trade and gross domestic product (GDP).

He said the African Continental Free Trade Area (AfCFTA) was created because of the difficulties African countries faced in trading effectively among themselves and delivering value.

The Ghanaian Times reports that Ghana has secured $8.7 billion in total revenue since it started exporting crude oil in April 2011 from its oil fields.

This, according to myjoy­, was captured in Ghana’s Petroleum Oil Accounts at the Federal Reserve Bank of New York and indicated that the revenue came from oil lift­ings, corporate taxes and other incomes.

The account details showed that oil liftings from April 2011 to December 2022 was $7 billion.

In all, $1.4 billion was ad­vanced to the Ghana National Petroleum Corporation (GNPC) as equity financing cost.

Also, $1.1 billion went to the Ghana National Petroleum Cor­poration (GNPC) to deal with capital investments.

The Annual Budget Funding Amount (ABFA), according to the report, took about $3.4 billion to finance some projects identified in the budget from April 2011 to December 2021.

The report further showed that $1.9 billion had been ad­vanced to the Ghana Stabilisation Fund Account at the Federal Reserve Bank in New York, USA.

The Stabilisation Fund is designed to help government overcome oil price shocks and revenue volatilities.

The Ghana Heritage Fund, which was also lodged at the Fed­eral Reserve Bank at the end of December 2022, stood at about $828 million.

In line with Section 23 (4) of the PRMA, Act 815 and Act 893, as amended, the cap remained unchanged at $100 million as set by the Minister of Finance (As part of the Minister’s mandate under the PRMA 2011, (Act 815) Section 23(3)) with a Parliamenta­ry resolution.

The accumulated excess over the cap withdrawn in second half (H2) of 2022 was $363.77 million. The new accumulated excess over the cap at the end of H2 2022 stood at $43.66 million.

Total amount withdrawn from inception to end of December 2022 amounts to $1.834 billion.

The report showed the Stabi­lisation Fund had an open book value of $190 million.

Receipts during the period ending December 2022 was $44 million.

The account showed that in terms of withdrawals, about $90 million had been taken out of the account.

This now leaves $143 million in the account in terms of closing book value.

However, investment income on this fund stood at $607,000.

The Heritage Fund had a clos­ing book value of $918 million ending December 2023.

The newspaper says that the government, in collaboration with the United Nations Develop­ment Programme (UNDP) and Unit­ed Nations Industrial Organisation (UNIDO), yesterday launched in Accra a $6.3m project to minimise the use of mercury in mining.

The “PlanetGold Project” is meant to make small-scale gold mining safer, cleaner, and more profitable in the country.

On the theme ‘Advancing for­malisation and mercury-free gold in Ghana’, it is being implemented by the Environmental Protection Agency (EPA) in partnership with UNDP, UNIDO and Global En­vironmental Facility for a five-year period spanning 2022 to 2027.

The implementation of the project is expected to minimise the risks posed by mercury use in the Artisanal and Small-scale Gold Mining (ASGM) sector by ensuring sound chemical management and eliminating pollution hazards.

Speaking at the launch, the Executive Director of EPA, Dr Henry Kwabena Kokofu, said the project would strengthen national and jurisdic­tional capacity to enhance Ghana’s compliance with the Minamata Convention, in accordance with national environmental policies, to support global platforms on mercury reduction, responsible supply chains and mineral resource governance.

He said the ASGM sector had witnessed consistent growth over the years, contributing about a third of the coun­try’s total gold pro­duction, and substantially giving finan­cial support to the economy.

The EPA executive director said the sector was still largely an informal one and was characterised by significant en­vironmental pollution and degrada­tion, which emanated from the use of unsafe chemicals such mercury in mining.

Dr Kokofu said even though the project could not start last year as scheduled, the implementation period would not change.

He noted that the project had come at an opportune time to improve the management of chemicals and eliminate pollution hazards, while improving financial inclusion and transition into the formal economy.

Dr Kokofu said the project was focused on “optimising formal­isation through jurisdictional approaches, accelerating financial inclusion and responsible supply chains, enhancing the uptake of mercury-free technologies, foster­ing knowledge sharing and local capacity building support.”

The Resident Representative of UNDP, Dr Angela Lusigi, said Ghana was Africa’s largest gold producer and with over one million Ghanaians employed in the sector.

She said the project represented a breakthrough in protecting hu­man health and the environment, adding that the project would help Ghana achieve the Minamata Con­vention on Mercury and promote green structural transformation.

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