The Bank of Ghana (BoG) allegedly created $22 billion in new currency without the consent of Parliament, according to allegations made by the minority in parliament.
The claim was made by Cassiel Ato Forson, a member of parliament representing the Ajumako-Enyan-Esiam Constituency, after Finance Minister Ken Ofori-Atta delivered the 2022 mid-year budget review on Monday, July 25.
The Finance Minister and the government went to the Central Bank and urged the BoG to print money of GH22 billion between January and June 2022, he claimed. Without the knowledge of Parliament and without informing any of us, they have minted GH22 billion in new currency.
“I am saddened, no wonder inflation is galloping, no wonder our reserves position is decreasing,” the speaker continued. Because inflation will increase when new money is created out of thin air, and because it is new money, you will inevitably lose your reserves because of new consumption. I won’t be surprised if we end the year with inflation of roughly 50% if this pattern persists.
Additionally, Mr. Ato Forson noted that the presentation was “extremely empty. Although the Minister of Finance appeared before us and said nothing, failing to address the very worries of the average Ghanaian, everything in this country is broken.
He returns today only to inform us that he was unable to meet all of the goals he had set for himself in the 2022 budget.
After the mid-year budget was presented in Parliament on Monday, July 25, the former deputy minister of finance told journalists, “Today, our public debt is above 400 billion cedis, and yet the Minister in this document fails to talk about the public debt.”
We’ve done it before, so we know we can do it, he continued.
According to the review by the finance minister, the overall real gross domestic product (GDP) for 2021 increased significantly by 5.4% as compared to the 0.5% recorded in 2020 and the revised 2021 annual objective of 5.1%.
At the time of presenting the 2022 Budget in November of last year, we gave information on macroeconomic trends during the first nine months of the 2021 fiscal year, he said, presenting the budget in Parliament on Monday, July 25.
We now have updated data up to the end of December 2021,” he stated.
In comparison to the 0.5 percent recorded in 2020 and the updated 2021 annual target of 5.1 percent, “Overall Real GDP for 2021 expanded substantially by 5.4 percent.”
The non-oil GDP growth rate also rose to 6.9 percent from 1.0 percent in 2020 and the revised objective of 7.0 percent for 2021. against a deficit target of GH19,730 million (3.9 percent of GDP), the entire budget deficit was GH28,095 million (5.6 percent of GDP).
Against a deficit objective of GH672 million, the primary balance for the period was a deficit of GH7,618 million (1.5 percent of GDP) (0.1 percent of GDP). In 2021, the public debt to GDP ratio was 76.6 percent.
According to him, the preliminary Q1-2022 National Accounts Statistics released by the Ghana Statistical Service (GSS) in June 2022 regarding the macroeconomic performance for the first half of 2022 show that the overall real GDP growth for the quarter was 3.3 percent as opposed to the 3.6 percent recorded in the same period. In comparison to Q1-2020, when non-oil GDP expanded by 5.3 percent, Q1-2022 had a growth of just 3.7 percent.
As I have already mentioned, the macroeconomic situation has changed dramatically, necessitating the revision of the 2022 Macroeconomic Framework, according to Mr. Ofori-Atta.
Additionally, we have amended the macro-fiscal targets for 2022 in accordance with the developments for the first half of 2022 and prognosis for the remainder of the year, as follows: Total GDP growth rate decreased to 3.7 percent from 5.8 percent, Non-Oil GDP growth rate decreased to 4.3 percent from 5.9 percent, End Period inflation increased to 28.5 percent from 8 percent, and the overall fiscal deficit decreased to 6.6 percent of GDP from 7.4 percent.
“The Gross International Reserves of not less than 3 months import cover; and a Primary surplus of 0.4 percent of GDP, up from a surplus of 0.1 percent of GDP.”