The Bank of Ghana has posted losses totalling GH¢60.81 billion for the 2022 financial year.
This compares to a profit of GH¢1.23 billion recorded in the 2021 financial year.
The losses were a result of the government’s domestic debt restructuring activities, and the
The Bank of Ghana faced significant challenges in the 2022 financial year, resulting in a substantial loss of GH¢60.81 billion, compared to a profit of GH¢1.23 billion in the previous year. These losses were primarily caused by the government's domestic debt restructuring efforts and the depreciation of the local currency, among other factors.
As of December 31, 2022, the Bank's audited financial statement revealed that its total liabilities, along with those of its subsidiaries, exceeded its total assets by GH¢54.52 billion. The decline in net worth was attributed to the impact of the Domestic Debt Exchange Program (DDEP) and the impairment of certain assets.
Specifically, the impairment of the Government of Ghana's securities holdings amounted to GH¢48.45 billion due to the DDEP, while loans and advances granted to Quasi-government and financial institutions suffered an impairment of GH¢6.12 billion. Additionally, the depreciation of the local currency resulted in a net exchange loss of GH¢5.27 billion.
Despite these challenges, the Bank's Board of Directors and Management carefully assessed the policy solvency implications arising from the negative net worth position. They considered the Group's ability to generate sufficient income to cover monetary policy operations and other operational costs. Based on expectations of an improved macroeconomic situation and targeted policy actions, the Directors decided to continue operating on a going concern basis.
To recover and restore positive equity, specific steps and actions will be taken. These include retaining profits to rebuild capital until equity returns to a positive region and refraining from monetary financing of the Government of Ghana's budget. Notably, a Memorandum of Understanding on zero financing of the budget was signed between the Bank of Ghana and the Ministry of Finance on April 26, 2023, indicating a commitment to addressing the issue.
The Bank of Ghana is also taking immediate measures to optimize its investment portfolio and operating cost mix to enhance efficiency and profits going forward. With a comprehensive plan in place, the Bank aims to bounce back from the losses and strengthen its financial position.
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