Diverted $250m not a violation by BoG – Governor

The Bank of Ghana says it was not in violation of the law concerning a tranche of $250 million alleged to have been “diverted” into a private account by government.

The Governor of the Bank of Ghana Dr Abdul-Nashiru Issahaku said the Bank of Ghana did not violate the law because it retained the forex and only gave out the cedi equivalent of the $250 million as is standard practice with Eurobonds.

Vice Presidential Candidate of the opposition New Patriotic Party Dr Mahamudu Bawumiah called for the resignation of Finance Minister Seth Terkper, accusing him of diverting $250 million of the $1 billion Eurobond issued in 2015, to a private account at the United Bank of Africa (UBA).

The Finance Minister has since dismissed Dr Bawumia’s claim as erroneous with the explanation that $250 million was allocated as seed capital in 2014 and not 2015, to the Ghana Infrastructure Investment Fund (GIIF) a statutory fund outside of central government funds, established by the Ghana Infrastructure Investment Fund Act, 2014 (Act 877).

The Finance Minister said the board of the GIIF had powers under the establishing law, to manage and invest contributions into the fund and the “diversion” to a private bank was part of the government’s strategy to earn interests on its “idle funds”.

Speaking to journalists at the central bank Monday May 16, 2016, he said, “From our standpoint, all foreign exchange has been in the custody of the central bank and when government needs their money, they take the equivalent in cedi. So the $250 million that was taken out of here, they didn’t take foreign exchange. The dollars was surrendered to the central bank; it was sold to the central bank. The government took the equivalent of that in cedis to go and deposit.”

“So by the Bank of Ghana Act, we have been in compliance,” the Governor said.

By Emmanuel Odonkor
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