Bank of Ghana’s statement is worthless and useless – Sammy Gyamfi

The National Communications Officer of the National Democratic Congress (NDC), Sammy Gyamfi, has described the statement released by the Bank of Ghana addressing concerns regarding the losses made in 2022 as worthless and useless.

His comment comes on the back of the Bank of Ghana’s statement released on August 10, 2023, responding to concerns raised by the NDC in their press conference calling for the resignation of the governor of the Bank of Ghana.

According to him, the statement does not address the fundamental issues raised by NDC with regard to the underlying factors and the actions and inactions that have led to the magnanimous GH¢60bn loss incurred by the Central Bank.

Speaking on Good Morning Ghana on Metro TV on Thursday, August 10, 2023, Sammy Gyamfi emphasized that the statement released by the Bank of Ghana provides flimsy excuses for the reckless expenditure that led to the huge losses.

“The statement from the Bank of Ghana which proposed to respond to the press conference of the National Democratic Congress on the state of our Central Bank is totally worthless and useless. As a matter of fact, that statement is not worthy of the sheet of paper it was printed on. And I say so for two main reasons.

“Number one, the statement does not address the fundamental issues that the NDC raised concerning the current health of the Bank of Ghana and the underlying factors or the actions and inactions of the bank that has led to that. The statement doesn't in any way address the fundamental issues we raise.

"Number two the statement is worthless and useless because it provides very flimsy and contrived excuses for the outrageous expenditures the bank engaged in last year, which, coupled with the mismanagement of the bank, has led to the crisis we have on our hands,” he said.

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.

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