BoG Reaffirms Commitment to Zero-Financing Deal Under IMF Program
The Governor of the Bank of Ghana (BoG), Dr Johnson Pandit Asiama, has reiterated that the central bank remains fully committed to the zero-financing arrangement agreed under Ghana’s current program with the International Monetary Fund (IMF).
Speaking at the 127th Monetary Policy Committee (MPC) press conference in Accra on Wednesday, Dr Asiama strongly dismissed claims suggesting that the Bank had been extending direct financial support to the Ghana Gold Board (Goldbod).
He clarified that Goldbod undertakes specific services for the central bank, and any financial transactions between the two institutions are strictly payments for those services, not budgetary financing.
“We are still under the Fund program, the zero financing conditions we are holding very strictly, there have been no violations, if there were any violations IMF would have raised concerns immediately. So we are not funding Goldbod; they are providing a service for us,” Dr Asiama stressed.
He added that any breach of the agreement would have prompted an immediate red flag from the IMF, making the circulating allegations inaccurate.
The zero-financing rule, established under the previous BoG leadership, was part of broader fiscal consolidation measures designed to prevent monetary financing of government expenditure. Under the arrangement, the central bank is barred from lending to the government, a measure deemed critical to reducing public debt and keeping inflation in check.
The policy gained prominence during the economic turbulence of 2022, when domestic borrowing challenges led to concerns about deficit financing. At the time, the Bank of Ghana committed, alongside the Ministry of Finance, to halt direct budget support from 2023 onwards.
This commitment was reinforced by the Head of Banking Supervision at the BoG, Osei Gyasi, during the launch of the Institute of Chartered Accountants Ghana’s (ICAG) 60th anniversary celebrations. He explained that curbing monetary financing was necessary to stabilise the economy.
“Monetary financing of the government deficit which was pursued to prevent domestic default arising from systemic auction failures during 2022 will end under the program,” he said.
Mr Gyasi noted that the zero-financing pledge was expected to support disinflation, ease pressure on the policy rate, and help rebuild Ghana’s foreign reserves. “To achieve this, the Bank of Ghana and the Ministry of Finance will commit to zero-financing of the budget in 2023 and beyond which is expected to trigger a disinflation path and downward trends in the policy rate as well as restore the country’s reserve buffers to at least three months of import cover by end-2025.”
The BoG maintains that it has adhered strictly to this requirement as Ghana continues to implement its IMF-supported reforms.
