The Minority in Parliament, alongside some Ghanaians, protested against the Bank of Ghana Governor, Ernest Addision and his deputies following a staggering GH₵60 billion loss, which the protestors say was because of mismanagement.
However, in contrast to this perspective, a banking consultant holds a different viewpoint.
According to Nana Otuo Acheampong, the 2022 BoG loss was not only abnormal but beyond the control of the central bank as a result of the Domestic Dept Exchange Programme (DDEP).
He explained that a DDEP is not a yearly occurrence and as such the BoG does not stand to lose such a huge sum of money continuously in the years to come.
“That GH₵60.8 billion is an abnormal loss in the sense that, yes, they made an income of GH₵5.5 billion, expenditure of GH₵66.3 billion, and the loss of GH₵60.8 billion. Now, that GH₵60.8 billion, 80% of that, which is GH₵48 billion, is related to the domestic debt exchange program, which was outside the control of the bank,” Mr Acheampong said.
“It was a government initiative to reach the IMF sustainability levels. They have to do this exchange, which was done,” he added.
The banking consultant indicated that even during Covid-19 the central bank made a profit and as such it is incorrect to claim the BoG incurred the loss they did in 2022 because of reckless spending.
“We cannot compare what happened in 2022 with the DDP to what happened in the prior years, where there were normal activities going,” Mr Acheampong noted.
This follows the NDC’s demonstration on Tuesday, in Accra, to demand the removal of the central bank Governor and his deputies for mismanaging the bank.
Although the protesters were prevented from accessing the central bank on the basis that it is a security zone, the leadership of the party including the MPs were allowed access to present their petition to the governor.
However, a man who identified himself as the Head of Security at the Bank appeared to receive the petition with the excuse that the BoG Governor was in a meeting with officials of the International Monetary Fund (IMF).
The protestors have vowed to return to the central bank with their petition.
But questioning the basis of the demonstration, Mr Acheapong said that the governor cannot be asked to leave his post over a technical loss that was not their fault.
“Their concern is about the GHS60 billion loss, which is a technical loss in the sense that that DDEP, what it did was to change the financial structure of the bonds. Once you change the financial structure, then by accounting standard, International Financial Reporting Standards (IFRS) 9, you have to make provision for the impairment, which is in layman’s language, provision for a loss. The bond is a loan, you grant it and then mature at a specified date.”
“Now, if the bond was issued to mature in, say, five years time and because of exogenous circumstances, it’s now maturing in 10 years time. Then it means you have changed the structure of that financial asset and by IFRS, you have to make provision for that. So 80% of the GHS60 billion was caused by that provision that was made under IFRS to ensure that there was compliance. So it’s not something that will happen every year.”
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