BoG reports GH¢60.81 billion loss for 2022

The Bank of Ghana experienced significant losses amounting to GH¢60.81 billion during the 2022 financial year, in stark contrast to the GH¢1.23 billion profit it recorded in 2021. These losses were primarily attributed to the government’s domestic debt restructuring activities and the depreciation of the local currency, among other factors.

The audited financial statement for 2022, released on July 28, revealed that as of December 31, 2022, the total liabilities of the central bank and its subsidiaries surpassed its total assets by GH¢54.52 billion. This decline in the net worth position was mainly due to the impact of the Domestic Debt Exchange Program (DDEP) and the impairment of some assets of the Group.

Specifically, the impairment of the Government of Ghana’s securities holdings amounted to GH¢48.45 billion, resulting from the DDEP.

Additionally, loans and advances granted to Quasi-government and financial institutions were impaired, causing a loss of GH¢6.12 billion. Moreover, the depreciation of the local currency led to a net exchange loss of GH¢5.27 billion.

Despite this challenging situation, the report highlighted that the Bank’s Board of Directors and Management had assessed the policy solvency implications and the Group’s ability to continue generating sufficient income to cover its monetary policy operations and other operational costs.

To address the negative net worth position and rebuild positive equity, the Bank plans to retain profits to rebuild capital until equity firmly returns to a positive region. Furthermore, they intend to refrain from monetary financing of the Government of Ghana’s budget, a step that has already been initiated with the signing of a Memorandum of Understanding on zero financing of the budget between the Bank of Ghana and the Ministry of Finance on April 26, 2023.

The Bank of Ghana is also taking immediate steps to optimize its investment portfolio and operating cost mix in an effort to enhance efficiency and profits.

Despite the challenging circumstances, the report emphasized that the Bank’s Directors will continue to operate on a going concern basis, buoyed by expectations of an improved macroeconomic situation and policy actions aimed at strengthening the Bank’s balance sheet.