Ghanaian MP challenges legality of Ghana Financial Stability Fund in letter to World Bank, IMF

November 3, 2023
Mahama Ayariga
Bawku MP Mahama Ayariga

Mahama Ayariga, a Member of and member of the minority in the Ghanaian Parliament, has written to the and the () country offices in Ghana, urging them not to support what he claims is the unconstitutional and illegal establishment of the Ghana Financial Stability Fund (GFSF) by the Minister of Finance and Economic Planning, Mr. Ken Ofori Atta.

In his letter, Ayariga argues that the GFSF, as detailed in a document from the and Economic Planning, is being set up without the necessary parliamentary approval and is managed by the Ghana Amalgamated Trust Plc (GAT), which he deems an illegal and unconstitutional entity.

He asserts that the GAT has the potential to deprive private indigenous bank owners of their assets, given the vulnerabilities of certain banks resulting from the minister's financial sector policies.

Ayariga draws attention to a pending Supreme Court case (Mahama Ayariga v. Attorney General & Others, Suit No. J1/20/2022) filed by him to challenge the legality of GAT and its operations, emphasizing that it is improper for GAT and the Ministry of Finance to undertake such an action on a large scale while the case is still pending.

He argues that GAT was established as a limited liability company under the Companies Act, 2016 (Act 992), with an arrangement between the Minister of Finance and GAT.

This arrangement, as stated in Ayariga's letter, has been contested in court for its potential unconstitutional transfer of public funds to private ownership without the required parliamentary approval.

Ayariga highlights several constitutional issues with GAT's establishment, stating that it lacks parliamentary approval and that the government is indirectly incorporating a company, GAT, to nominate a private entity to hold its shares, which is deemed unconstitutional.

He further emphasizes that the constitutional requirements for setting up public corporations as commercial ventures are not met, as they are subject to parliamentary approval.

He also points to constitutional provisions related to parliamentary approval for loans from public funds, which he claims were not followed.

Ayariga concludes by asserting that the “Operational Framework of the Ghana Financial Stability Fund (GFSF)” detailed by the Ministry of Finance is illegal and unconstitutional, as it seeks to establish public funds through mere administrative guidelines issued by the Ministry of Finance, bypassing the required legal processes mandated by the Ghanaian constitution.

He implores the World Bank and IMF not to lend their support to this arrangement, as it would be in violation of the Ghanaian constitution. The matter is the subject of a pending court case and raises important questions about the legality of the GFSF and its administration by GAT.

Latest from Finance