The Annual report of the Bank of Ghana has revealed that the central bank recorded a loss of 60.8 Billion Ghana cedis for 2022.
The 2022 Financial Accounts explained that the loss can be attributed to decline in the Group’s net worth position due to the impact of the Domestic Debt Exchange Programme (DDEP) and impairment of some assets of the Group.
According to the report, “the total liabilities of Bank of Ghana and its subsidiaries exceeded its total assets by GH¢54.52 billion”. In 2021, the Bank recorded a surplus of 5.72 bilion Ghana cedis .
Breakdown of Loss Positions
Impairment of Government of Ghana securities holdings of GH¢48.45 billion. This was occasioned by the Government of Ghana Domestic Debt Exchange Programme. Impairment of loans and advances granted to quasi-government and financial institutions amounting to GH¢6.12 billion.
Deprecation of the local currency resulting in net exchange loss of GH¢5.27 billion, compared to a gain of GH¢1.07 billion in 2021.
The central bank said the Board of Directors and Management of the Bank have assessed the policy solvency implications arising out of the negative net worth position and the Group’s ability to continue to generate enough income to cover its monetary policy operations and other operational costs.
‘The Bank will continue to operate on a going concern basis due to a variety of factors underpinned by expectations of an improved macroeconomic situation and policy actions specifically targeted at improving the balance sheet of the Bank of Ghana, the report said.
The Bank has outlined measures to address the challenges identified and they are:
Retention of profits to help rebuild capital until equity firmly returns to positive region.
Refraining from monetary financing of the Government of Ghana’s budget. In this respect, action has already been taken with a Memorandum of Understanding on zero financing of the budget signed between the Bank of Ghana and the Ministry of Finance on 26 April 2023;
Taking immediate steps to optimize Bank of Ghana’s investment portfolio and operating cost mix to bolster efficiency and profits; and
- Assessing the potential need for recapitalisation support by the government in the medium-to-long term.
The Board of Directors and Management are of the view that “ continued efforts at restoring macroeconomic stability and debt sustainability in addition to long-term efforts at building reserves, provide enough basis for continued operational policy efficiency existence for the foreseeable future”.
By: Rainbowradioonline.com/Ghana
