Deputy Finance Minister-designate Thomas Nyarko Ampem has ruled out using public funds to recapitalize the Bank of Ghana following the significant losses recorded in recent years.
Speaking before Parliament’s Appointments Committee, he expressed confidence that the central bank will return to profitability, enabling it to absorb the losses without direct fiscal intervention.
The Deputy Finance Minister-designate assured that the government would not use public funds to restore the central bank’s capital position.
The BoG has gone through some challenges. I think for the past two years they have been recording losses. In 2022 they posted losses of about 60.8 billion and that was mainly because of their exposure to the DDEP. It affected the Bank of Ghana. The following year they posted losses again to the tune of about 10 billion or so. Currently, their negative equity is around 66 billion.
“I have heard people suggesting that we should use public funds to recapitalize the Bank of Ghana but I think in these difficult times it maybe too much of a burden on the Ghanaian taxpayer. I am just hoping and praying that this year maybe BoG will start making profit so they plough back some of their profit to clear some of the negative equity,” he said
The Bank of Ghana, in its 2022 Published Annual Report and Financial Statements, reported a loss of GHC 60.8 billion largely attributed to the impact of the domestic debt exchange programme, which significantly impaired the bank’s balance sheet.
This development has raised concerns among economic stakeholders about its potential long-term impact on the economy
The BoG has severally defended its position, stating that despite the losses, it remains solvent and capable of performing its mandate. Former Governor, Dr. Ernest Addison also indicated that the bank’s financial position will improve as economic conditions stabilize.
Nyarko Ampem’s remarks suggest that the government is not considering an immediate bailout for the central bank, even as some analysts argue that recapitalization may be necessary to strengthen its balance sheet. Instead, the focus appears to be on allowing BoG to regain stability through operational profits and economic recovery.
The issue of central bank losses has been a key topic in Ghana’s economic discourse, with opposition parties and financial experts raising concerns about BoG’s independence and the long-term implications of its financial challenges. However, the government maintains that the bank’s situation does not warrant urgent intervention from the national budget.
Comments