If BoG can't manage money, how do you expect Duffuor to be able to do that? - A Plus asks

Kwame Asare Bediako, popularly known as A Plus, one time-musician turned political activist, has voiced his displeasure regarding the recent financial loss of GH¢60 billion incurred by the Bank of Ghana in 2022.

A Plus expressed his concerns in a social media post, highlighting what he referred to as the irony of the central bank's inability to manage its own finances while overseeing the stability of the country's banking sector.

He highlighted how the same bank supposed to provide oversight for other financial institutions had been caught in mismanagement of its funds yet it had years back closed banks in the much talked-about financial sector cleanup.

In his post, A Plus remarked, "Some people mismanaged banks so you collapsed their banks and brought charges against them, but you have lost 60 billion of poor taxpayers' money and you are still at post instead of committing suicide. Kwasea! If BoG can't manage money how do you expect Kwabena Duffuor to be able to do that?"

Background

The Bank of Ghana incurred a significant loss in 2022 largely as a result of the DDEP, its 2022 Annual Report, and Financial Statement have said.

According to the report, the central bank’s holdings of government debt were restructured whereas non-marketable holdings of Government of Ghana instruments including long-term stocks, a COVID-19 Bond, and overdrafts were subjected to a 50 percent haircut.

Bank of Ghana’s other claims (holdings of marketable instruments) were exchanged under similar terms as other financial institutions under the DDEP.

This led to an impairment of GH¢48.40 billion in 2022.

At the same time, the Central Bank incurred revaluation losses on its foreign assets and liabilities due to exchange rate depreciation. The impairments and revaluation losses led to a negative equity position of GH¢55.12 billion for 2022.

The report also stated that despite a healthy trade surplus, the balance of payments recorded a deficit of US$3.64 billion on account of significant net outflows in the capital and financial account.

This led to a drawdown of US$3.46 billion in Gross International Reserves from US$9.70 billion at end-December 2021 to US$6.24 billion at end-December 2022, providing 2.7 months of import cover.

The significant drawdown in reserves triggered immense currency pressures and the reduction in the Common Equity Tier 1 capital ratio to 5.5 percent, from 6.5 percent, and an increase in the maximum Tier 2 capital ratio to 3.0 percent, from 2.0 percent of total risk-weighted assets.



AM/SARA



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