BoG’s GHS60.8bn loss: Akufo-Addo and Bawumia have committed economic atrocities – Kwakye Ofosu

Former Deputy Minister of Information Felix Kwakye Ofosu has accused President Nana Addo Dankwa Akufo-Addo and the Vice President, Dr Mahahudu Bawumia of committing economic atrocities.

He described the current government as the worst ever in he history of Ghana.

“Akufo-Addo and Bawumia have committed economic atrocities, the latest being forcing the Bank of Ghana to lend tens of billions of Ghana cedis to the government against the law and leading to the former’s insolvency. The worst government ever,” he tweeted.

He was commenting on the GH60.8 billion loss made by the Bank of Ghana.

The Bank said this is due to the impairment of the Government of Ghana’s securities holdings of ¢48.45 billion, the 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”.