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The Minority Caucus in Parliament has urged the government to stop the politicisation of the crisis confronting the Bank of Ghana (BoG) and take steps to save the BoG.
It has, therefore, requested a transparent central bank recapitalisation plan based on the terms of the Memorandum of Understanding (MoU) signed between the Ministry of Finance and the BoG.
“The plan should specify the total recapitalisation amount, annual tranches, instrument type, maturity, coupon, budget treatment, parliamentary approval requirements and expected path to restoring positive equity,” it said.
The Ranking Member on Parliament's Committee on Economy and Development, Kojo Oppong Nkrumah, at a press conference last Thursday to outline proposals for the resolution of the BoG crisis, entreated the government to include the BoG’s recapitalisation in fiscal-risk analysis, stressing that “the government’s medium term fiscal framework should explicitly recognise the central bank’s negative equity as a contingent or direct fiscal obligation, depending on the agreed recapitalisation mechanism.”
He called on the BoG to publish a policy solvency calculation that excluded one-off items such as refined gold sale gains, asset revaluations, exceptional cost recoveries, and non-recurring transactions.
He emphasised the need to strengthen disclosure of quasi-fiscal operations.
Mr Oppong Nkrumah said gold programmes, foreign-exchange support operations, open market operations (OMO) costs, and government-related receivables should be disclosed in a way that allowed Parliament, investors and citizens to distinguish monetary operations from fiscal interventions.
Urging the bank to review the governance of gold transactions, he said the central bank should publish clearer information on the purpose, approval framework, counterparties, settlement cycle, risk controls and financial outcome of gold transactions.
“The secrecy that surrounded the sale of 18 tons of gold reserves remains a matter of grave concern,” he said.
Turning the spotlight on the domestic debt exchange programme (DDEP), Mr Oppong Nkrumah said the final treatment should be reflected consistently in public debt statistics, fiscal accounts, and the bank’s financial statements.
On the need to request an accounting treatment review, he said the fund should encourage an independent technical review of material non-standard accounting treatments, including foreign exchange gains and losses routed through reserves, monetary gold accounting, IMF-related off-balance-sheet treatment and government receivable recognition.
With regard to the recommendation to protect the prohibition on monetary financing, Mr Oppong Nkrumah said post-programme safeguards should include continued monitoring of zero central bank financing of the budget, with clear reporting of any exceptions, arrears, overdrafts or indirect financing arrangements.
“The advice by the IMF to the government to pass the amendments to the Bank of Ghana Act to allow monetary financing of the Page 5 of 7 government by the bank was the greatest disservice to the country, and this would come hurting our economy if not addressed.
“The government should publish a quarterly dashboard covering central bank equity, OMO liabilities, government deposits, Bank of Ghana claims on government, recapitalisation progress, gold-related receivables and liabilities, and contingent liabilities,” he recommended.
