Bank of Ghana is asking for GH¢53b bailout – Minister

The Bank of Ghana is asking for GH¢53 billion bailout to address the central bank’s negative equity position.

Presenting the 2025 Budget this morning in Parliament, the Minister of Finance, Dr Cassel Ato Forson said there are mounting and accumulated arrears/payables, including the central bank’s negative equity position.

“Mr. Speaker, the Bank of Ghana is also asking for a bailout of about GH¢53 billion to address their negative equity position. Mr. Speaker, as part of measures to address these mounting accumulated arrears/payables, we have commissioned an audit of these arrears/payables and guarantee value for money before payment,” he said.

When the Bank of Ghana released its full-year 2022 audited financial statements on July 28, 2023, the financial statements reported a total loss of GH¢60 billion. The Bank explained that GH¢53.1 billion of those losses were a direct result of the government’s domestic debt restructuring exercise.

In 2023, the Bank reported a loss of GH¢10.5 billion which it said was in line with experiences of some central banks globally as a result of the cost incurred in delivering on their primary mandate of price stability.

The Bank cited other reasons for the loss, such as interest rates being at high levels, the cost of conducting open market operations which surged in 2023, and contributed to high interest expense.

It noted also that impairments on newly issued Government of Ghana Bonds, per International Financial Reporting Standards, added to the loss position reported in the year.

The Bank further stated that on the income side, the improvement in interest income and earnings derived from the Bank’s foreign investments could not keep pace with total expenditures.

According to the Minister, in addition to the GH¢67.5 billion in arrears/payables, the validation process also revealed that MDAs have committed government through contract awards in excess of GH¢194 billion, about 16.5% of GDP as at end-2024, with the road sector alone accounting for over GH¢100 billion.

“Mr. Speaker, most of these contracts were awarded without commencement certificates and authorization, and without budgetary provision, a blatant violation of the Public Financial Management Act, 2016 (Act 921),” he added.

Dr Forson said apart from the huge arrears and commitments, the country’s fiscal situation is further complicated by huge bullet debt service and constrained financing options.

“Currently, the government’s options to financing the budget is limited to only the treasury bill market following the debt restructuring programme,” he said.

By Emmanuel K Dogbevi

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