Home Business All debts owed banks to be cleared by Sept. – Finance Minister

All debts owed banks to be cleared by Sept. – Finance Minister

Finance Minister Ken Ofori-Atta has promised to clear all debts owed banks as well as the energy sector debts by next month.

The assurance has been influenced by government’s decision to enforce the Public Financial Management Act which requires the finance minister to move all state funds to the Bank of Ghana (BoG).

According to some commercial banks, full implementation of the Treasury Single Account (TSA) would impact negatively on their operations.

They have therefore called on the government to pay all debts owed them or stagger the process, before it goes ahead with the second phase of the Treasury Single Account.

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But speaking to JOYBUSINESS after the launch of the Treasury Single Account the finance in Accra today minister, Ken Ofori Atta said the government is committed to clearing all the debts very soon.

“We have already started paying the arrears to the clients of these banks and we are also expecting that once we successfully launch the energy sector bond that would also go a long way to clear the energy sector debts,” he added.

Status of Transfer

According to the head of revenue and cash management at the Controller and Accountant General’s Department (CAGD), Dr. Mohammed Sani Abdulai out of the about 17000 accounts, a little over 3000 accounts have been moved to the Bank of Ghana.

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It is believed that government might be able to move accounts at a little over 5 billion cedis from these commercial banks when it completes the process by the end of September.

Banks and TSA

Speaking at the same programme to launch the Treasury Single Account, Governor of the Bank of Ghana, Dr Ernest Addison rejected arguments that the implementation of the policy would negatively affect operations of the Commercial Bank.

He said several scenarios carried by managers of the policy showed that it would have little impact on banks.

According to some analysts implementation of this policy should stop the practice where government borrows its own idle funds at commercial banks to finance its budget at an interest.

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As a component of the Public Financial Management Act, the implementation of the TSA is expected to support government efforts to enhance an efficient management of public funds as it would consolidate all government accounts into one single account.

On the one hand, some have also argued that TSA is necessary to improve oversight and management of government funds. This should also aid anti-graft drives due to the improved accountability.

Source: myjoyonline.com

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