The Governor of the Bank of Ghana, Dr. Ernest Addison says the GH¢60.8 billion loss in the bank’s 2022 Annual Report and Financial Statements, will not affect the bank’s operations.
Addressing the press on Monday, August 21, 2023, Dr. Addison said the International Monetary Fund (IMF) had already affirmed this position through its Technical Assistance mission prior to extending a bailout.
He said that “Central Banks are not commercial banks,” and that the Bank of Ghana’s present financial state would not exert any negative impact on its day-to-day activities.
He referenced the IMF’s evaluation which declared the bank “policy solvent and would remain so, as it had enough income to cover monetary policy operational costs.”
He explained that in all the bank’s activities, it acted within the laws.
“There has been zero financing in 2017, 2018, 2019 and 2021. The Bank of Ghana has only had to support in the pandemic year of 2020 and the crisis year of 2022.”
“The Bank of Ghana Act (612), as amended, limits financing of Government to 5 percent of previous year’s tax revenue. This provision in the law has been adhered to since I took office in April 2017. Between 2017 and 2019, in addition to the requirements of the Bank of Ghana Act (612), as amended, the Bank signed a Memorandum of Understanding (MOU) with the Ministry of Finance to even impose a tighter restriction of zero central bank financing, and this was observed strictly, even though MOUs are not legally binding. Between 2012 and 2015, the Bank of Ghana provided overdraft to finance the government and Cocobod every year. And there was neither a pandemic nor a global economic crisis,” he explained.
“When Ghana was hit with Covid-19 in 2020, Section 30(6) of the Bank of Ghana Act (612), as amended, was triggered, and as indicated earlier, the Bank purchased GHC10 billion worth of Covid-19 bonds to support the economy through the pandemic. This was done within the applicable laws governing the Bank of Ghana. When section 30 (6) of the Bank of Ghana Act (612), as amended, is triggered, it, allows the Governor, the Minister for Finance and the Controller and Accountant General to agree on a new limit of central bank financing.”
