The Finance Minister, Ken Ofori-Atta, has described as needless attacks on the Governor of the Bank of Ghana, Dr. Ernest Addison.
It is the view of the minister that the primary objective of the Bank of Ghana, like all central banks, is not to generate profit.
In an article titled “Standing Strong With The Bank of Ghana,” he posited that the central bank should be managed as a financially sustainable institution rather than focusing solely on profitability.
His comments follow the demand for the resignation of the governor and his two deputies following the loss of GHS60.8 billion in 2022 and negative equity of GHS55.1 billion in 2022.
The minority is also concerned about the bank’s decision to write off a GHS 48.40 billion debt owed by the Akufo-Addo government when it has not sought parliamentary approval.
The Minority was also not happy that the central bank has unvested and approved GHS250 million for the construction of a new headquarters.
Reacting to these claims, the Miniater said “In fact, as some critics of the Central Bank in our country do observe, the primary objective of a central bank is not to make a profit but to be managed as a financially sustainable institution”, Mr Ofori-Atta wrote in an article titled: ‘Standing Strong With The Bank of Ghana’.
“We must, in these extraordinary times…deploy all the instruments we have available and sail together through this odyssey,” the Finance Minister, Ken Ofori Atta wrote in an article titled “Citizens – Standing Strong with the Bank of Ghana.”
“The call for us, as citizens, is not to be seen as punishing the Bank of Ghana for pitching up to support the greater public good!”
“It is probably a good time to recall the wise words of the late Professor P.A. V Ansah that even as we educate and inform, we must foster national cohesion because ‘…national cohesion is the foundation upon which any and everything is built’”.
He explained that the government’s debt operations that commenced in 2022, and were executed this year, “has had a significant impact on Bank of Ghana’s balance sheet while reducing the amount of money spent on interest payment Exchange government”. “As of 2022, the central bank held about GHS42.3 billion of government’s domestic debt, out of the total (domestic) debt stock of GHS194.3 billion”.
“In addition to others, resulted in a loss impairment provision of about GHS48b for the Bank in 2022”.
He said, as indicated by the IMF, the BoG was “the loss absorber for the debt exchange to ensure that in light of the concessions to other domestic bondholders, its burden share of the debt exchange will enable the economy to still achieve the overall objectives of the Exchange – the Domestic Debt Exchange Programme will ensure the NPV of the stock of public sector debt is halved from the then 105 percent of GDP (later recalculated as 89%) to 55 per cent of GDP by 2028, thereby putting the country on a sustainable debt trajectory”.
He also reaffirmed the position taken by the BoG that, “all efforts will be made to restore the balance sheet of the Bank in the medium term, continue to improve the efficiency of their operations, and resort to the government for recapitalisation over the medium to long term if necessary”.
“There is, therefore, no need for a direct attack on the leadership of the central bank”.
By: Rainbowradioonline.com/Ghana
