Govt does not need approval for IMF support — Ato Forson
The Ministry of Finance has explained that Ghana’s three-year extended credit facility (ECF) programme with the International Monetary Fund (IMF) does not constitute government borrowing that requires parliamentary approval.
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It said the loan, which was approved by the IMF Board based on a letter of intent signed by the Minister of Finance and the Governor of the Bank of Ghana (BoG), was disbursed directly to the bank as balance of payment support.
The facility, according to a Deputy Minister of Finance, Mr Cassiel Ato Forson, would be used accordingly by the bank without supervision or interference by the Minister of Finance or any other governmental authority.
Mr Forson was reacting to the statement by the Minority in Parliament on the illegality of Ghana’s programme with the IMF due to the lack of a parliamentary approval.
In an interview with the Daily Graphic, he explained that the minister signed the letter of intent together with the Governor of the BoG because some of the policies underpinning IMF programmes were policies to be implemented by the government.
“The IMF loan to the BoG does not constitute government borrowing within the ambit of Article 181 of the Constitution. The borrowing would, therefore, not require parliamentary approval,” he said.
No approval required
Mr Forson said under Article 181 of the Constitution, loans that were supposed to receive parliamentary approval were those that would be serviced out of the Consolidated Fund or any other public fund.
“It is worth noting that the IMF loan to the BoG is not part of government debt and the current government debt levels exclude loans taken from the IMF. The IMF loan will not be serviced out of the Consolidated Fund or any other public fund and, therefore, does not qualify to be a loan defined in Article 181,” he maintained.
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What the Constitution says
Section 6 of Article 181 of the Constitution states that “for the purpose of this article, ‘loan’ includes any moneys lent or given to or by government on condition of return or repayment, and any other form of borrowing or lending in respect of which:
(a) moneys from the Consolidated Fund or any other public fund may be used for payment or repayment; or (b) moneys from any fund by whatever name called, established for the purposes of payment or repayment, whether directly or indirectly, may be used for payment or repayment”.
Mr Forson explained that the Executive authority of Ghana was not exercised through the BoG and that the BoG did not qualify, in that sense, as government.
He said the Minority in Parliament did not understand the IMF programme, thus their statement was born out of ignorance.
“Clearly, this is a case of lack of understanding. The threat of legal action is empty. We broke no law or rule. We did not breach the Constitution. This is born out of ignorance. The loan will be serviced by the BoG from its own operations, just like all IMF programmes,” he said.