Bank of Ghana Suffers GHS60.6 Billion Loss in 2022 Due to Debt Exchange Programme
The Bank of Ghana (BoG) has reported a significant loss of GHS60.6 billion in 2022, primarily attributed to the impairment of the Government of Ghana’s securities holdings amounting to ¢48.45 billion, impairment of loans and advances to quasi-government and financial institutions totaling ¢6.12 billion, and a net exchange loss of ¢5.27 billion due to the depreciation of the local currency.
This loss comes as a result of the Government of Ghana Domestic Debt Exchange Programme. In response to this financial setback, the BoG’s Board of Directors and Management conducted an assessment of the implications and the group’s ability to generate sufficient income to cover its monetary policy operations and operational costs.
Despite the negative net worth position, the directors believe that the BoG will continue to operate on a going concern basis. Several factors underpin this belief, including expectations of an improved macroeconomic situation and targeted policy actions aimed at enhancing the balance sheet.
The BoG has outlined measures in its Annual Report that it believes will aid in its recovery. These measures include retaining profits to rebuild capital until equity returns to a positive region, refraining from monetary financing of the Government of Ghana’s budget, optimizing the bank’s investment portfolio and operating cost mix to enhance efficiency and profits, and assessing the potential need for recapitalization support from the government in the medium-to-long term.
The Board of Directors and Management are confident that continuous efforts to restore macroeconomic stability, ensure debt sustainability, and build reserves provide a solid basis for the bank’s operational policy efficiency and existence in the foreseeable future. Despite the challenges, the BoG remains committed to improving its financial standing and continuing to play a critical role in Ghana’s economy.
