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Friday, December 6, 2024
BusinessLawyer petitions court to freeze govt’s borrowing on T-bills

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Lawyer petitions court to freeze govt’s borrowing on T-bills

Legal practitioner Jonathan Amable has petitioned the Supreme Court to impose an immediate injunction on government borrowing through treasury bills.

The application seeks to prevent the government and its representatives from issuing treasury bills to fund operations, citing the absence of parliamentary approval for such actions, which he argues violates the 1992 Constitution.

In his writ, Amable contends that without this prohibition, the government’s borrowing will continue to harm the economy. The Attorney General of Ghana is named as the defendant, and the suit also accuses the Ministry of Finance and Bank of Ghana of unconstitutional actions in the issuance of treasury bills.

Amable’s application highlights the risk of economic fallout, noting that if the borrowing contracts are deemed unconstitutional, they may be voided, jeopardizing the investments of banks, microfinance institutions, insurance companies, pension funds, and everyday Ghanaians. This, he argues, endangers the stability of the financial sector and the public’s invested capital.

The suit references Section 30 of the Bank of Ghana Act, 2002 (Act 612), and Section 61 of the Public Financial Management Act, both of which require parliamentary oversight on government borrowing via treasury bills and debt instruments.

Amable’s request targets only new borrowing transactions and does not aim to prevent the government from meeting obligations on existing debt, provided repayment funds are not drawn from new, unapproved borrowing.

“That the consequence of the relevant borrowing contracts being conducted without the requisite parliamentary approval makes them liable to be declared void for unconstitutionality and such a consequence will be made more dire by the fact that the holders of the offending debt instruments include banks, savings and loans companies micro-finance companies, asset management companies, insurance companies, pension funds and ordinary Ghanaians. Accordingly, the unconstitutional conduct of the state potentially jeopardises the entire Ghanaian financial sector and hard-earned capital of the investing public”, the application read in part.

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