For fear of the country being blacklisted by creditors, the Chairman of Parliament’s Finance Committee, rushed to the floor of the August House, seeking to alter Finance Minister, Ken Ofori-Atta’s alarming words that the country’s gross international reserves had been depleted from US$9 billion to US$3 billion.
Kwaku Agyemang Kwarteng, had through the Committee, laid the report before the House copiously quoting the Yale University-trained Finance Minister, that the country was days away from bankruptcy, therefore, urgently needed a US$750 million loan facility from AfreximBank to support the economy, but has since been seeking to expunge the frightening words afraid of a negative reaction from investors and others.
Ghana, is broke and said to be almost close to the state of bankruptcy suffered by Sri Lanka where fuel, medicines and other essential commodities could not be purchased by Gotabaya Rajapaksa government leading to mass protests, civil unrest and the toppling of that government.
Mr Kwarteng, who is a two term Member of Parliament (MP) for Obuasi West Constituency in the Ashanti Region and a former Deputy Minister of Finance, last Friday, less than 24 hours, hurried back to the House to purge Parliament’s records of Mr Ofori-Atta’s SOS cry that got the US$750 million loan facility by both sides of the House, but was unsuccessful.
The Finance Minister, is expected in the House, later today to attempt eating back his words on the same subject that the country’s gross international reserves had been depleted from US$9 billion in December 2021 to US$3 billion ending June
The New Patriotic Party (NPP) MP after getting the money arguing on the claims by his former boss, rushed back to Parliament, saying the statement by Mr Ofori-Atta, was regrettably made in “error”.
“Mr Speaker this was an error. It was an unfortunate oversight,” he stated.
“According to the Bank of Ghana, the gross international reserves of the country was 9.7 million dollars. This declined to 7.68 billion dollars at the close of June 2022. In terms of net international reserves, the country closed December 2021 with 6.08 billion dollars.”
“This position declined to 3.58 billion dollars at the close of June 2022. The error is regretted, and I request the clerk at the table to ensure that all the records are accordingly corrected,” he said and asked the Clerk at the Table in parliament to ensure the records are accordingly corrected.
But the Minority, insists that the statement was an attempt to conceal the true nature of the country’s perilous economic situation with the Ranking Member on the Committee, Dr Cassiel Ato-Forson, took issues with the demand saying the statement cannot be used to amend reports of Committees.
“I not aware that a statement can amend a Committee’s report after the Committee report had been adopted and subsequently approved. Mr. Speaker, the 3 billion that Committee reported did not just surface. These are statement that came from the Minister responsible for Finance. Mr. Speaker, I was in that meeting”.
Referring to Mr Kwarteng, Dr Ato-Forson, insisted that he does not think that he is clothed with the powers to amend the statement, adding if the information available to the Parliament is different from what the Central Bank has, it is up to the Central Bank to issue a statement and clarify the matter.
“The Bank of Ghana, should issue a statement to correct same”, Dr Ato-Forson stressed.
The Minority Chief Whip, Alhaji Muntaka Mubarak, added his voice to the matter arguing that the information that the international reserves had been depleted from US$9 billion to US$3 billion was provided by the Finance Minister himself and none other.
To him, the latest twist means that the Finance Minister lied to the Committee to convince them to approve the US$750 million loan agreement from AfreximBank.
Referring to Mr Kwarteng, the Minority Whip said if what he sought to do was anything to go by, he had done more harm than good as his claims meant that Mr Ofori-Atta, lied to the Committee to get the loan.
“If what he is saying is true, it means the Minister of Finance lied to the Committee, and Mr. Speaker, I am saying that all these legs, he makes the situation worse”, the Minority Chief Whip said.
The Deputy Majority Leader, Alexander Afenyo-Markin, stepped in saying that this would not be the first time that a correction of this nature would be made and the very senior members of the House, can attest that “it is not an error is being corrected”.
The amendment was however stood down by the intervention of the Majority Leader, Osei-Kyei Mensa Bonsu who said the house cannot amend an approved report with a statement, and disclosed that the Finance Minister will make a statement on the matter when he appears on the floor of the house today, Monday.
Later at a press conference, the NDC MP for Bolgatanga Central, Isaac Adongo, said it is obvious that the government is engaged in cooking of figures and that the Finance Minister slipped by revealing the truth about the state of affairs.
This, he argued, accounts for the reason why the Summary Economic cannot be released because, the Minister of Finance has his own data which is insistent with that of the Governor of the Bank of Ghana creating confusion in the minds of both investors and Ghanaians.
Before the Press Conference by the Minority MPs, the 2nd Deputy Speaker of Parliament, Andrew Amoako Asiamah, who was in the chair, tasked the leadership of the house to resolve the controversy surrounding the true position on the state of the country’s foreign reserves at the Central Bank.
Portions of the alarming report under a subheading “Importance of the facility” said that “The Hon. Minister of Finance explained to the Committee that the approval of the facility is urgently needed to avoid the country going bankrupt and help the country meet its obligations.
He indicated that Ghana has over the past recent years accessed financing from the International Capital market and domestic bond market to support the implementation of its budget.
However, the international capital market is not available to Ghana this year as a result of the downgrade of the country’s credit rating by international rating agencies.
The Government’s intention to raise funds from the domestic bond markets did not also yield the desired result.
Consequently, the economy is presently challenged with rising inflation, rising interest rates, exchange rate depreciation and increasing energy cost.
These challenges are further exacerbated by the rapidly dwindling reserves of the Bank of Ghana which has declined from US$9bn to about US$3bn. With a monthly demand of over US$600 million, the reserve of the central bank may be exhausted in a few months if urgent steps are not taken to shore up the country’s reserves.
The Minister further indicated that there is the urgent need for the Government to secure the US$750 million facility to help shore up the reserve position of the Bank of Ghana to avoid the country defaulting on its international commitments and also avoid the country moving into insolvency.
The Minister explained that, the facility may seem expensive on the face of its terms but is a reflection of market overall conditions in Africa as evidenced by the cost at which many African countries borrow from the international market.