Government Now Borrows To Pay Salaries – Report

The Ghanaian government is currently borrowing money to pay employees all around the nation in order to meet it’s financial needs.

In addition, the government plans to issue more gross bonds this year than it did between October and December of last year. In comparison to the GH21,170.00 million raised in the domestic bond market in the previous quarter, the gross amount to be issued in Q1 2022 is GH3, 330.00 million more.

The government expects to issue new instruments to raise GH3,785.51 million, according to the Finance Ministry’s Issuing Calendar for the duration of this year. The current anticipated additional borrowing exceeds the GH1,040.70 million that the government raised through the issue of new bonds in the fourth quarter of 2021.

Meanwhile, the administration requires Parliament’s approval of the $1 billion loan in order to pay salaries and fulfill other urgent obligations, according to the chairman of the Finance Committee of Parliament.

Kwaku Kwarteng asserts that the loan before Parliament will also help the nation pay its debts.

For several weeks, the minority in parliament has prevented the loan from being approved.

According to them, the government has not said what the funds would be used for.

They, therefore, want government to provide the committee with full documentation on what exactly the money would be used for to enable them to make a meaningful decision.

But the Obuasi West legislator insists that the loan is critical for the country’s short-term survival.

“We will need to pay our salaries we will need to service our debt. There are things to do right now that require a facility like this to be procured.

“That is why some of us support government here and hope that we will really deal with our debt matters that are not recent and they have been piling up over the years that we would come together and formulate reformed actions that are needed to deal with this once and for all,” he told JoyNews on Tuesday.

The Finance Ministry is seeking Parliament’s approval for a $750 million loan facility agreement between AfreximBank and a $250 million loan agreement from a syndication of banks to finance Capital and Growth-related expenditures in the 2022 budget.

The loan, according to government, is critical to fixing the economy in the short term before a bailout can be agreed upon with the International Monetary Fund (IMF).

Meanwhile, it appears government may get $750 million after the Minority softened its stance.

Source: GhanaFeed.com