Appearing before Parliament’s Appointments Committee, Deputy Finance Minister-designate Thomas Nyarko Ampem expressed confidence in BoG’s ability to rebound without direct fiscal support.
“The Bank of Ghana has faced significant challenges, recording losses for two consecutive years. In 2022, the bank posted a staggering GHC 60.8 billion loss, primarily due to its exposure to the Domestic Debt Exchange Programme (DDEP), which severely impacted its balance sheet. The following year, losses hovered around GHC 10 billion, pushing negative equity to approximately GHC 66 billion,” he stated.
Despite calls from some quarters advocating for government intervention to shore up the central bank’s capital, the Deputy Finance Minister-designate emphasized the burden such a move would place on taxpayers.
“In these economically challenging times, it would be an undue strain on the Ghanaian public to use state funds for BoG’s recapitalization. We are optimistic that the bank can return to profitability and use future gains to address its negative equity,” Nyarko Ampem added.
The Bank of Ghana’s 2022 Annual Report and Financial Statements underscored the depth of its financial woes, attributing the bulk of its GHC 60.8 billion loss to the DDEP, which led to significant impairments on its balance sheet. The ongoing financial strain has raised red flags among economic stakeholders, who worry about the long-term stability of the central bank and its ability to maintain macroeconomic balance.
However, BoG has consistently reassured the public of its resilience. Former Governor Dr. Ernest Addison previously asserted that the central bank remains solvent and capable of fulfilling its mandate, despite the recorded losses. He also expressed optimism that as Ghana’s broader economic environment stabilizes, BoG’s financial health would naturally improve.
Nyarko Ampem’s clear stance against a government-funded bailout signals a strategic decision to maintain fiscal discipline amid economic headwinds. Financial analysts remain divided on the approach. While some argue that allowing BoG to self-recover could preserve public funds and encourage operational efficiency, others warn that delaying recapitalization might weaken the bank’s position and hinder its ability to implement critical monetary policies.
The debate over BoG’s financial state has also fueled broader conversations around the bank’s independence and governance. Opposition parties and financial experts have questioned the central bank’s risk management practices, calling for greater transparency and accountability.
The focus now shifts to BoG’s ability to navigate its financial challenges independently. Stakeholders will closely monitor its 2024 performance, hoping for signs of profitability that could help reverse the negative equity without burdening the national budget.
As Ghana grapples with broader economic recovery efforts, the resilience of its central bank remains a critical factor in stabilizing markets and restoring investor confidence. Whether BoG can weather this financial storm without government intervention will be a defining moment in the country’s fiscal narrative.
Last Updated on April 2, 2025 by samboad
