The Bank of Ghana (BoG) has said it cannot be insolvent or bankrupt, as claimed by the National Democratic Congress (NDC).
This comes barely 24 hours after the NDC at a press conference led by Minority Leader, Dr Cassiel Ato Forson, called for the immediate resignation of the BoG Governor, Dr Ernest Addission, and his two deputies.
The Ajumako Enyan Essiam MP stated that the bank has recorded negative equity of over GHS55.1 billion, which simply means that the Bank of Ghana is insolvent.
“In other words, the once prestigious Bank of Ghana, the mother of all banks in Ghana, has been bankrupted and collapsed by this NPP economic management team led by Dr Mahamudu Bawumia with the complicity of the Governor of the Central Bank,” he said.
But in a statement, the Central Bank said as a non-commercial bank, its financial outcomes have little implication on its operations.
“Technically, Central Banks cannot be insolvent or bankrupt,” the statement read in parts.
According to BoG, it only acted as a loss absorber for the country.
“It is important to put the Bank of Ghana’s 2022 financial results in proper context with a clear statement of the problem that Ghana faced and the chronology of events in Ghana since 2019.
“There was a clear mismatch between revenue inflows and expenditure financed in 2020 by
exceptional support from the IMF and World Bank resources, and in addition to financing from
the Bank of Ghana through the issuance of the GHS10 billion Covid-19 bond,” BoG explained.
The statement noted a result, the Credit Rating Agencies further downgraded Ghana’s sovereign debt rating, which blocked Ghana’s access to international capital market borrowing.”
It said central banks across the globe recorded price and exchange rate movements that led to “a loss of GH¢5.2 billion while impairments of Cocobod loans amounted to GH¢4.7 billion”.
“This is the reason the Bank of Ghana reported a loss of GH¢60 billion in 2022.
“Central banks are not commercial banks. This financial outcome has very little implication for the operations of the Bank of Ghana as supported by evidence from other central banks,” the statement detailed.
Meanwhile, BoG has assured key stakeholders and the general public as a whole that the highest standards of prudent management, governance and transparent accounting and audit practices have been committed to.
