The majority caucus in Parliament has described as unethical and dangerous the National Democratic Congress’ (NDC) justification of the GH¢7 billion expenditure which the Vice-President, Dr Mahamudu Bawumia, said had not been disclosed by the previous administration.
The NDC caucus in Parliament, in dismissing the Vice-President’s claims, explained that the amount in question was the result of a reform on government contracts and expenditure which formed part of the Ghana Integrated Financial Management System (GIFMIS) project.
The money, according to the NDC, also formed part of the contract database and outstanding commitments and did not constitute conventional definition of arrears.
Unethical conduct
However, the Chairman of the Finance Committee in Parliament, Dr Mark Assibey-Yeboah, at a news conference yesterday, said what the former Deputy Finance Minister, Mr Ato Forson, described in his earlier news conference as creative accounting management in relation to the money in question was “unethical and dangerous”.
He stated that the reaction from Mr Forson depicted a team that was grossly unaware of the extent to which the nation’s books had been cooked to provide a false sense of good economic management and to deceive investors.
“More worrying is the fact that the former deputy minister attributed the arrears accumulation to reforms underway and the way in which data was captured,” Dr Assibey-Yeboah said, adding that; “The explanation in justifying the amount in question is an admission that the amount has been kept out of the purview of the books of the government and constitutes real expenditure undertaken.”
Role of IMF
On the role of the International Monetary Fund (IMF), Dr Assibey-Yeboah indicated that the New Patriotic Party (NPP) was of the view that given the fact that the implementation of the Extended Credit Facility (ECF) with the IMF was still underway, the fund stood in a better position to make the issue surrounding the GH¢7 billion clear.
“As to whether this represents a breach of the ECF programme conditionalities, we will know by the end of next week when the mission chief is expected to brief donors in its findings,” he added.
According to the finance committee chairman, that might yet represent another serious breach of the ECF and if care was not taken, punitive actions could be meted out to the country, recalling how Ghana was fined to the tune of $39 million in 2000 when a similar issue occurred.
Implications for budget
Dr Assibey-Yeboah disclosed that already, the government was learning of a budget deficit on a cash basis of 8.5 to 9.5 per cent of gross domestic product (GDP) and that the new uncovered arrears could throw the overall budget deficit to 10-11 per cent of GDP.
“Who finances these expenditures? Is it the Bank of Ghana through the banks? Is it from the $250 million that was provided by UBA Bank?” he questioned.
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