BoG’s ‘illegal’ printing of money caused depletion of Ghana’s external reserves – Ato Forson

The Minority Leader, Dr Cassiel Ato Forson, has accused the Bank of Ghana of causing the depletion of the country’s external reserves.

Presenting the Minority’s response to the 2023 mid-year budget review in Parliament on Wednesday, Dr Ato Forson said “the Bank of Ghana’s printing of money caused the depletion of Ghana’s external reserves which resulted in the unprecedented depreciation of the Cedi, the main cause of the hyper-inflation in 2022”.

The Cedi, he said, depreciated from GHC6:$1 to over GHC15:$1 in the year 2022, adding that “this is over 100% depreciation on a straight-line calculation”.

The Minority Leader said depreciation coupled with inflation have reduced the rich to the middle class and above all the poor have become poorer.

He further added that due to inflation alone, an estimated 850,000 people were reported by the World Bank to have been pushed further down the poverty line in 2022.

Dr Ato Forson said despite the earlier spirited denials by the Bank of Ghana and the government, “the government now admits that indeed the Bank of Ghana printed money to finance its over-bloated government expenditures in 2022.”

“Paragraph 8 of the IMF Staff Report gives further detail that the Bank of Ghana illegally printed over GHC45 billion representing 7.2% of GDP in 2022 alone, and GHC35 billion in 2021. This is the first in the history of Ghana”, he said.

Describing the Central Bank as “a crime scene”, the Minority Leader said the government was instrumental in the commission of the sins of the Bank. “The Bank of Ghana is certainly a crime scene and the economic managers led by Mr. Strategist aided and abetted this economic crime”, Dr Ato Forson added.

He said on the watch of the current managers of the economy, Ghana’s public debt shot up from GHC120 billion in 2016 to GHC600 billion by the end of 2022, representing an increase of about 400%.

The Minority Leader pointed out that following the high debt levels, the country could not honour its obligations to its local and foreign debtors. “As a result of these high debt levels, Ghana defaulted in the repayment of both our domestic and foreign debts, the first time in our history”.

He said this explains why pensioners picketed at the Ministry of Finance to demand the payment of their interest and principal, which was another unenviable first in the history of Ghana. He added that “rating agencies downgraded Ghana’s creditworthiness to “D”, in other words, ‘super junky’“.

Dr Ato Forson observed that Ghana’s financial sector has virtually collapsed, with all the 23 banks in the country recording “massive impairment losses of over GHC18 billion in 2022”.

He said “This is excluding the impairment losses of the non-bank financial institutions and the insurance companies”, adding that “the cost of the economic mismanagement by this government is unprecedented”.

Dr Ato Forson, who once served as a Deputy Minister of Finance, said the Akufo-Addo/ Bawumia government’s domestic debt restructuring has not only affected the commercial banks but has also negatively affected the Bank of Ghana.

He said, “In fact, the Bank of Ghana is in a major financial distress and bankrupt, and requires urgent attention”.

In 2022, the Bank of Ghana recorded a loss of over GHC60.8 billion and negative equity of over GHC55.1 billion.