Ghana’s central bank, the Bank of Ghana after incurring a whooping GH¢60 billion in losses for the 2022 financial year has explained the circumstances that led to that astronomical setback. Having recorded GH¢1.23 billion in the year before, BoG’s finances went on a downward spiral, setting them back by over 48 times what they gained a year before.
However, the central bank has explained what caused it to suffer such massive losses, attributing the result to the impact of government decisions. BoG said, the government’s Domestic Debt Exchange Programme, DDEP, impacted it just like it did any other bank in the country. It said, that alone set the central bank back by GH¢48.1 billion.
In an interview on Citi FM’s Eyewitness News, Dr Philip Abradu-Otoo, Director of Research at BoG said, “The central bank was making profits two-three years ago, last year, we made about GH¢1.2 billion of profits, but this year, it’s totally reversed and gone into a loss of GH¢60 billion. I don’t recollect BoG recording a loss in the past, this is the first time we are recording a massive loss. It’s a big deal.”
According to Dr Abradu-Otoo, “The reason for the loss is primarily due to the Domestic Debt Exchange Programme. Just as the banks suffered losses on their holdings of government instruments, the BoG also suffered a loss on its holdings of government instruments-marketable instruments and non-marketable instruments.
Because of “The impact of the DDEP on these two items,” he said, the bank “incurred a loss of GH¢48.1 billion. We also had some loans to COCOBOD which were impaired as a result of the DDEP. DDEP impact that has swung our balanced sheet into negative territories.”
Dr Abradu-Otoo assured that the losses are not a result of bad policies or poor management but due to the two external factors he mentioned.
“What we are seeing on the balance sheets of BoG is not as a result of reckless policy, or bad decisions but the direct impact from DDEP. All is safe, carry on with your normal businesses”.
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