For the fiscal year 2022, the Bank of Ghana reported losses totaling GH¢60.81 billion. This contrasts with a profit of GH¢1.23 billion realized in the fiscal year 2021.
The government’s efforts to restructure its domestic debt as well as other factors, such as the local currency’s depreciation, contributed to the losses.
According to the BoG’s audited financial statement for 2022, which was published on Friday, July 28, 2023, as of December 31, 2022, the total liabilities of the central bank and its subsidiaries exceeded the total assets by GH¢54.52 billion.
The Domestic Debt Exchange Program’s (DDEP) effects and the impairment of a few of the Group’s assets were both blamed for the decline in the Group’s net worth position.
This was specifically brought on by the DDEP’s impact on the government’s security holdings, which totaled GH¢48.45 billion; the impact on loans and advances made to quasi-government and financial institutions, totaling GH¢6.12 billion; and the impact on the local currency’s depreciation, which resulted in a net exchange loss of GH¢5.27 billion.
The report stated that the Board of Directors and Management of the Bank had evaluated the policy solvency implications arising out of the Group’s negative net worth position and its ability to continue to generate enough income to cover its monetary policy operations and other operational costs.
Retaining profits to help rebuild capital up until equity firmly returns to the positive region, as well as refraining from monetary financing of the Government of Ghana’s budget, are specific steps and actions to be taken to recover and build-back a positive equity.
A Memorandum of Understanding on Zero Financing of the Budget was signed on April 26, 2023, by the Bank of Ghana and the Ministry of Finance, signaling that action has already been taken in this regard.
In order to increase efficiency and profits, the BoG is also immediately taking steps to optimize its investment portfolio and operating cost mix.
