Gov’t exceeded borrowing limit in 2012

The government exceeded its borrowing limit at the Bank of Ghana (BoG) by about 170% in 2012. This was contained in the Auditor-general’s report for 2012. The AG’s report is a comprehensive audit report on the public accounts of public boards, corporations and other statutory institutions in Ghana. According to the report, government and the central bank went contrary to laws of Ghana to allow huge government borrowing. The borrowing limit imposed in the BoG Act. Section 30 subsection 2 stipulates a limit of 10 percent of revenue for the fiscal year. The limit indicates government had a borrowing ceiling of GH¢ 826.4 million. However, government borrowed about GH¢ 2.22billion which is about 27 percernt of total revenue and about 170 percent more than statutorily require. The report also revealed that the HIPC special accounts which had received funds of about GH¢ 240 million as at December 2010 had a withdrawal of about GH¢320 measuring an over-drawal by about GH¢ 83 million. The auditor-general also noted that agreements governing short term loan facilities granted by BOG to National Investment Bank (NIB) and Ghana Commercial Bank (GCB) had expired and no new agreements have been signed with these institutions. With respect to NIB, a loan amount of GH¢60million was due on 30 September 2009. The report indicates NIB however applied to BOG for an extension of the loan duration to 31st March 2010, of which the central bank granted. The extension of the loan of which at the time of reporting was still unpaid, did not have any security backing it. The auditor-general’s report also revealed that assets and liabilities resulting from transactions on the petroleum fund have not been separated, but accounted for as part of the Bank of Ghana’s assets and liabilities. On another institution, the National Petroleum Authority, the auditor-general revealed that 4 Toyota Corolla vehicles purchased from Western Automobile Ghana Ltd had been overpaid by about GH¢25,500. This indicates an extra GH¢ 6,400 on each car. The cost per one vehicle as stated in the contract agreement is about GH¢42,500 but each vehicle has been recorded in the books at about GH¢48,900.

Source:Citifmonline.com