The minority New Patriotic Party (NPP) in Parliament has taken a swipe at President John Dramani Mahama for apparently violating the constitution following government’s Extended Credit Facility (ECF) agreement of US$918 million with the International Monetary Fund (IMF).
Addressing a news conference at Parliament yesterday the minority spokesperson on Finance, Dr. Anthony Akoto Osei argued that the ECF “is a lending arrangement (i.e. loan) that provides sustained program arrangement over the medium term (three years in Ghana’s case) in anticipation of protracted balance of payments problems,” which must be approved by parliament.
Supported by the Minority Leader Osei Kyei-Mensah-Bonsu and Alex Afenyo-Markin, a member of the Finance Committee of Parliament and other colleagues, Dr. Akoto Osei contented that Article 181 (3) of the constitution states “No loan shall be raised by the Government on behalf of itself or any other public institution or authority otherwise than by or under the authority of an Act of Parliament”
Article 181 (4) further states “An Act of Parliament enacted in accordance with clause (3) of this article shall provide
(a) That the terms and conditions of a loan shall be laid before Parliament and shall not come into operation unless they have been approved by a resolution of Parliament and
(b) That any moneys received in respect of that loan shall be paid into the Consolidated Fund and form Part of that fund or into some other public fund of Ghana either existing or created for the purpose of the loan”
Again, Article 181 (6) stipulates that “For purpose of this article ‘loan’ includes any moneys lent or given to or by the 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 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.”
The minority spokesperson on finance who is also a former minister of state at the Ministry of Finance and MP for Old Tafo said the combined effects of Article 181 (3) (4) and (6) is that President Mahama has violated the Constitution as far as the IMF ECF loan is concerned.
“In this respect we strongly demand that the President takes immediate corrective measures and call on the Speaker to cause Parliament to be recalled to approve of or otherwise of the IMF ECF Loan.
“We demand further that this exercise be undertaken no later than by the end of this month, September 2015,” the minority caucus demanded.
Minority pursues all avenues
Dr. Akoto Osei said despite the demand for a recall of Parliament by the Speaker to rectify this gross violation of the Constitution, the minority reserves the right to use all avenues to ensure that the sanctity of the Constitution is protected should the government be adamant.
“President John Dramani Mahama in assuming office swore an oath to abide by the laws of the country, especially the 1992 Constitution,” he pointed out, insisting the minority group will ensure the sanctity of the constitution.
Dr. Akoto Osei said, “We further call on the IMF to cease further disbursements on the ECF until Parliament has approved of the Facility.
“In fact we are surprised that the IMF with all its experience in the surveillance of its programs will condone such an egregious act by the government of Ghana.
“We recall that in the case of the bail-out program for Greece, the IMF insisted that the Greek Parliament should approve of the framework for the bail-out condition even after the people of Greece had rejected those conditions in a referendum held singularly for the purpose.
“We do not want to believe that the IMF uses different rules for different countries. This is an issue of good governance practice and we would like to believe that the IMF stands for this principle,” Dr. Akoto Osei noted.
He said whilst conceding that the onus of responsibility for complying with national laws lies first with the government, when the attention of the IMF is drawn to the matter they must respond appropriately.
Recognising that his economic policies were not bringing the expected results, President Mahama in in August 2014, requested an arrangement with the IMF to help support stronger policy adjustment, restore market confidence and revive Ghana’s “transformational agenda”.
The arrangement or bail out as it is popularly known aims at a sizeable frontloaded fiscal adjustment to restore debt sustainability, rebuild external buffers and eliminate fiscal dominance of monetary policy.
After protracted negotiations, the IMF Executive Board on April 3rd, 2015 approved a three year ECF arrangement in the amount of SDR 664.2 million equivalent to about US$918 million.
With the approval, the IMF released an amount of SDR 83.025 million equivalent to about US$116.6 million.
In return for the loan, the government pledged to undertake certain programs and activities which were to be monitored and assessed by the IMF under what is called the “performance criteria” on a periodic basis. These criteria include a floor on the primary fiscal balance; a ceiling on the wage bill; a floor on net international reserves; a ceiling on net domestic assets of the Bank of Ghana; a ceiling on the net change in the stock of arrears; a ceiling on gross financial of BoG to GoG; non-accumulation of external arrears; non-accumulation of domestic arrears; and a ceiling on contracting or guaranteeing new non-concessional external debt.
In fulfillment of the monitoring and assessment requirements, the Executive Board of the IMF on August 31st 2015, completed the first review of the performance under the ECF program and approved of an additional disbursement of SDR 83.025, the equivalent of US$116.6 million to government of Ghana.
Dr. Akoto Osei indicated that from April 3 to date the Government of Ghana has received a loan of about US$233.1 from the IMF.
“As an aside we note that in completing the review the IMF Board granted waivers for GoG’s non observance of two performance criteria, i.e. those relating to non-accumulation of external arrears and gross credit by BoG to government,” he noted.
Source: The Custodian/ghananewshub.com