The Bank of Ghana recorded a GHS60.6 billion loss in 2022 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 of 6.12 billion, and the depreciation of the local currency resulting in a net exchange loss of 5.27 billion.
The loss was caused by the Ghanaian government’s domestic debt exchange programme.
According to the BoG, its Board of Directors and Management evaluated the policy solvency implications of the group’s negative net worth position, as well as the group’s capacity to generate enough income to fund its monetary policy activities and other operational costs.
According to the directors, the Central Bank would continue to operate as a going concern due to a number of variables, including forecasts of an improved macroeconomic scenario and policy efforts aimed primarily at boosting its balance sheet.
The Central Bank described these initiatives in its Annual Report, believing that they would aid recovery.
These include: profit retention to help restore capital until equity returns to a positive zone.
Refraining from monetary support for the Ghanaian government’s budget. In this regard, action has already been made, with a Memorandum of Understanding on zero financing of the budget signed on April 26, 2023 by the Bank of Ghana and the Ministry of Finance.
Immediate actions are being taken to optimise the Bank of Ghana’s investment portfolio and operating cost mix in order to boost efficiency and profits.
Considering the government’s possible need for recapitalization assistance in the medium to long term
It went on to say that the Board of Directors and Management believe that “continued efforts at restoring macroeconomic stability and debt sustainability, as well as long-term efforts at building reserves, provide a sufficient basis for continued operational policy efficiency existence for the foreseeable future.”
