The International Monetary Fund (IMF) has said the loss Bank of Ghana (BoG) incurred in 2022 is as a result of the Domestic Debt Exchange Programme (DDEP) implemented by the government.
It said the loss BoG suffered in 2022 contributed to reducing the net equity of the Central Bank to a negative value.
The IMF, which disclosed this in its frequently asked questions on the Ghana IMF programme posted on its website, further said BoG absorbing part of government debt was to reduce the burden the DDEP placed on government debt holders.
“The BoG participated in the DDEP to share some of the burden the DDEP places on government debt holders, along with banks, other financial institutions, pension funds and individuals,” the IMF said in the answer to the question “why did the BoG incur losses from the authorities’ domestic debt exchange and what are their implications.”
It said the DDEP was a key element of plans by the government to restore macroeconomic stability and public debt sustainability.
The 2022 annual results and financial statement issued by the BoG indicated that the Central Bank recorded a loss of GH¢60 billion.
The Minority in Parliament has accused the BoG of mismanagement which has resulted to the loss of the Central Bank and asked the Governor, Dr Ernest Addison and his deputies to resign.
The IMF said the negative equity position did not prevent the BoG from fulfilling its policy mandates and ensuring inflation gradually returns toward its 8 per cent target.
The IMF said the BoG’s net equity was expected to improve significantly over time and eventually return to positive territory.
In a related development, the Minority in Parliament has criticised the BoG for the construction of a new headquarters estimated to cost more than $200 million in these difficult times.
However, the BoG explained that the construction of the new head office had become necessary because the current head office was not fit for purpose and not earthquake or tremor resistant following a structural audit conducted on the building.
But the Acting Director-General of the Ghana Geological Survey Authority, Isaac Mwinbelle, has justified the need for the Central Bank to relocate from its current location to Ridge, citing seismic reasons.
He told the GBC News that although the current location of the BoG had not experienced any tremor yet, it was closer to the earthquake zone of the country.
Mr Wwinbelle said the BoG was closer to the coastal part of Ghana, which was an earthquake prone zone as result of fault lines.
“There are fault zones in these areas, but they have not produced any substantial earth tremor, but it doesn’t mean that there cannot be an earth tremor along those fault lines, and for that matter, if BoG is being proactive by doing an assessment to find out whether recent location is suitable for a Central Bank or not, I think it is a plus for them because they must ensure the safety of the bank, the safety of the staff, as well as the safety of whatever is contained in there,” he said.
He said given the structural integrity assessment by the BoG, the new headquarters building at Ridge would be constructed to withstand any earthquake or tremors
BY KINGSLEY ASARE
