Ghana paid a whopping GH¢753,875.29 as penalties to its external creditors in the 2014 financial year.
This is due to the failure of the Debt Management Division (DMD) of the Ministry of Finance (MoF) to service the country’s debt on time.
Attempts by the Auditor-General to reconcile the records at the DMD to ascertain the true state of affairs was also stifled, due to lack of cooperation from the DMD Desk Officers, the audit report on Consolidated Fund, signed by the Auditor-General, Richard Quartey said.
Consequently, the Auditor-General has urged the MOF and the Controller and Accountant General’s Department to “improve their process time for loan repayment to avert the risk of delay”.
The report said no provision was made in the Chart of Account for payment of the penalties and as a result “payment of penalties were not disclosed separately in the public accounts but rather included as part of total government of Ghana interest payment.
The DMD of the MOF is responsible for the management of the country’s loans, including repayment when they fall due.
The report said the anomalies at the DMD resulted in the “non-movement of some overdue external debt loans balance” some of which should have been “long paid- off”.
“Other anomalies noted were negative loans balance disclosed in the public accounts depicting overpayments to some lending instutions,”it said, adding that lack of management’s attention to the recording of external debt accounted for the unsatisfactory state of affairs.
The report said the DMD used the Commonwealth Secretariat Debt Recording and Management System (CSDRMS) to record, monitor and report on public debt, including all external debts, as well as government on-lending and loan agreement.
“I observed that the external debt records on the CSDRMS are not updated regularly to reflect the true external debt position of Ghana,” the Auditor-General stated in the report.
According to the report, the Auditor-General noted that “despite receipt of advice(s) by the division on external loan disbursement by creditor institutions as well as information on loan repayments by the government, these information are not regularly updated on the CSDRMS. I also noted irregular adjustment in some of the creditor’s balance.”
The report observed lack of cooperation between the External Resource Mobilisation (ERM) unit of the ministry and the DMD, as the ERM did not communicate expected loan disbursement it facilitated on behalf of the Project Implementation Unit with lending institutions to the DMD.
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