The Bank of Ghana (BoG) has said the analysis of the 2022 financial performance of the Central Bank by the Minority in Parliament without taking cognisance of the economic situation in the country is misleading.
It said the year 2022 was the peak of economic and social crisis in Ghana, a culmination of fiscal overruns and debt distress resulted in Ghana losing access to both international and domestic markets.
The BoG stated this in a statement it issued in Accra on Wednesday in response to claims by the Minority in Parliament that the BoG has been mismanaged.
The Minority at a press conference in Accra last Tuesday alleged that the BoG had been mismanaged and the Governor, Dr Ernest Addison and his deputies should resign.
It said rating agencies last year downgraded Ghana to the junk category with huge macroeconomic imbalances and the cedi depreciated sharply from GH¢6 to the dollar at the end of 2021 to almost GH¢13.1 to the dollar at the end of November 2022 until it came down to about GH¢8.57 to the dollar at the end of December 2022 (resulting in about 30 per cent on a year-on-year basis and averaged 31.13 per cent).
“Similarly, inflation rose from an average of 12.62 per cent at the end of December 2021 to 54.14 per cent at the end of December 2022. These developments had a significant impact on the operations of the Bank and every other entity in the country,” the BoG stated.
The difficult macroeconomic conditions and the Domestic Debt Exchange Programme (DDEP) elevated the operational cost and resulted to a loss of the bank, and not mismanagement.
The BoG explained that the more than GH¢131 million expenditure on Vehicle Maintenance was as a result of fuel cost, which accounted for more than 90 per cent of the Vehicle and Maintenance Expense.
“Given the scale of the bank’s operations, ensuring that the currency is distributed to every corner of the country to ensure seamless medium of exchange for our legal tender, the cedi, such a cost is a major line in our operations and any such changes would lead to a huge jump,” the BoG said.
It said the huge jump in computer expenses was mainly the result of the bank’s asset replacement policy which was implemented in 2022 where most of the desktop computers were replaced with laptops.
On the investment in the new head office building for the BoG, it explained that a structural integrity assessment conducted by the BoG revealed that the current BoG Head Office building, built by the Nkrumah Government in the early 1960s, was no longer fit for purpose and could not stand any major earth tremors.
On the GH¢60 billion loss the BoG incurred in 2022, it said it was partly due to the DDEP.
“The Bank of Ghana was used to close the gap to enable Ghana meet the debt threshold that qualified Ghana for the International Monetary Fund programme (Bank of Ghana therefore, acted as a loss absorber). This means the Bank of Ghana had to absorb a 50 per cent haircut on its non-marketable holdings of government debt instruments. This singular act led to significant impairment losses of GH¢ 32.3 billion to the bank’s accounts. Impairments of marketable instruments also accounted for another GH¢16.1 billion, bringing the total impairments of Government holdings to GH¢48.4 billion,” it stated.
BY KINGSLEY ASARE
