The Governor of the Bank of Ghana (BoG), Dr. Ernest Addison, has called for significant amendments to the Bank of Ghana Act to address the systemic issue of long-term government debt accumulation.
Speaking on Joy News’ PM Express Business Edition on January 2, 2025, Dr. Addison proposed reforms mandating governments to repay central bank borrowings within the fiscal year of issuance.
Dr. Addison highlighted the historical roots of the problem, revealing that government borrowings dating back to the 1980s PNDC era remain unpaid. This legacy debt, he explained, contributes to widespread misconceptions about the central bank’s financial position, including criticism over the reported GH¢60 billion loss.
The BoG Governor defended the institution’s autonomy and commitment to fiscal discipline, noting its record of zero financing for government budgets from 2017 to 2019. The temporary GH¢10 billion financing during the COVID-19 pandemic in 2020, he emphasized, was an exceptional measure approved by Parliament.
“Once we put reforms in place that force governments to pay back in the same year, you will not have this accumulation of debt over 20 to 25 years,” he stated, highlighting the need for measures that tackle the root causes of Ghana’s growing debt burden.
Dr. Addison also addressed concerns about the BoG’s independence, pointing out that the priority should be on holding the government accountable for repaying loans borrowed from the central bank.
He stressed the importance of legislative reforms to prevent long-term debt accumulation and to protect Ghana’s financial stability, noting that such changes would help avoid a repeat of past mistakes.
“We need reforms that not only ensure fiscal discipline but also preserve the integrity of the financial system. It’s about making sure that the mistakes of the past are not repeated,” he concluded, calling for urgent steps to safeguard the economy.
If these reforms are implemented, they could greatly enhance fiscal responsibility, promote better financial management, and ensure that government borrowing aligns with sustainable economic practices.
