Ghana Seeks Law Change to Ban Central Bank Funding of Government

  • Nation seeks to comply with conditions under IMF program
  • Lawmakers rejected similar proposal on funding in July

Ghana will ask lawmakers to prohibit the government from drawing on funds from the central bank as the nation seeks to comply with conditions imposed by the International Monetary Fund under a $933 million credit program, Finance Minister Seth Terkper said.

Lawmakers in July rejected a similar proposal to bar borrowings from the Bank of Ghana, opting instead to reduce the cap on such financing to 5 percent, from 10 percent previously.
The IMF last month approved a third payment under a $933 million credit program agreed to in 2015 in return for monetary and fiscal reforms aimed at stabilizing the currency and reining in inflation, which peaked this year at 19.2 percent in March.

“I will go to parliament with the proposed amendment,” Terkper said in an interview Tuesday in the capital, Accra. The IMF “wants the law on central bank financing to be amended to reflect zero percent instead of 5 percent,” he said.

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