The Bank of Ghana (BoG) has disclosed that GH¢53.1 billion out of the GH¢60 billion losses reported in the 2022 financial statement was as a result of the government’s domestic debt restructuring exercise (phases 1 and II).
In a statement issued today, the BoG said, “The financial statements reported a total loss of GH¢60 billion, which has since become a matter of unfortunate politicisation. It is noteworthy that GH¢53.1 billion of those losses was a direct result of the Government’s domestic debt restructuring exercise (phases 1 and II)”.
The statement added that it is important to put the Bank of Ghana’s 2022 financial results in proper context with a clear statement of the problem that Ghana faced and the chronology of events in Ghana since 2019.
Also, it indicated that there was a clear mismatch between revenue inflows and expenditure financed in 2020 by exceptional support from the IMF and World Bank resources, in addition to financing from the Bank of Ghana through the issuance of the GH¢10 billion COVID-19 bond.
It is as a result of this that the sovereign spreads on Ghana bonds widened, signaling investor dissatisfaction with the stance of fiscal policy.
The institution further disclosed that the Budget for 2022, which was read in 2021, failed to address fiscal concerns as the Budget was even more expansionary by about 23% with a raft of revenue measures to raise financing.
It is for this reason that the Credit Rating Agencies further downgraded Ghana’s sovereign debt rating, which blocked Ghana’s access to international capital market borrowing.
“This triggered a liquidity crisis, spilling over into a balance of payments crisis. External and domestic payments needed to be made, the domestic auction was failing, and the Bank of Ghana had to step in to arrest a major economic and social crisis.
“In two months, the Bank of Ghana lost US$500 million in reserves and built a significant overdraft with the government as a result of the auction failures. It became clear that Ghana was on a path that was unsustainable, and the Government had to approach the IMF for support in July 2022”, the statement read.
In this regard, the Bank of Ghana has assured key stakeholders and the general public that it is committed to the highest standards of prudent management, governance, and transparent accounting and audit practices.
