Former President John Dramani Mahama has criticised the Governor of the Bank of Ghana Dr Ernest Addison for the challenges that the central bank is going through.
In the view of Mr Mahama, Governor Addison has destroyed the Bank of Ghana.
“An incompetent Finance Minister damages the economy and uses Covid-19 and Ukraine/Russia war as cover-ups. A pliant Governor destroys the Central Bank and seeks to use DDE as a cover,” he tweeted.
An incompetent Finance Minister damages the economy and uses Covid-19 and Ukraine/Russia war as cover-ups. A pliant Governor destroys the Central Bank and seeks to use DDE as a cover.#BuildingGhanaTogether #TheGhanaWeWant
— John Dramani Mahama (@JDMahama) August 10, 2023
The Bank of Ghana recorded GHS60.6billion loss in 2022. The Bank said this is due to the impairment of the Government of Ghana’s securities holdings of ¢48.45 billion, impairment of loans and advances granted to quasi-government and financial institutions amounting to ¢6.12 billion and the depreciation of the local currency resulting in net exchange loss of ¢5.27 billion.
The loss was occasioned by the Government of Ghana Domestic Debt Exchange Programme.
According to the BoG, its Board of Directors and Management assessed the policy solvency implications arising out of the negative net worth position and the group’s ability to continue to generate enough income to cover its monetary policy operations and other operational costs.
In the view of the directors, the Central Bank will continue to operate on a going concern basis due to a variety of factors underpinned by expectations of an improved macroeconomic situation and policy actions specifically targeted at improving its balance sheet.
In its Annual Report, the Central Bank, outlined these measures which it believed would help it recover.
These include: Retention of profits to help rebuild capital until equity firmly returns to positive region.
Refraining from monetary financing of the Government of Ghana’s budget. In this respect, action has already been taken with a Memorandum of Understanding on zero financing of the budget signed between the Bank of Ghana and the Ministry of Finance on 26 April, 2023;
Taking immediate steps to optimise the Bank of Ghana’s investment portfolio and operating cost mix to bolster efficiency and profits; and
Assessing the potential need for recapitalisation support by the government in the medium-to-long term
It furthered that the Board of Directors and Management are of the view that “continued efforts at restoring macroeconomic stability and debt sustainability in addition to long-term efforts at building reserves, provide enough basis for continued operational policy efficiency existence for the foreseeable future”.