Ghana’s Central Bank reported a loss of approximately 60 billion Ghanaian cedis (equivalent to $5.2 billion or £4.3 billion) during the 2022 financial year according to reports from the BBC.
The revelation has sparked off protests across the nation’s capital Accra calling for the resignation of the Bank of Ghana’s Governor, Ernest Addison and his deputies during the week
The demonstration, known as #OccupyBoG, was organized by the opposition National Democratic Congress (NDC) party. Participants, clad in red shirts, scarves, and berets, voiced their discontent through chants and carried banners, with some bearing the message “Stop the looting, we are suffering.”
Speaking to the BBC, Professor Godfred Bokpin of the University of Ghana said
- “We have never seen anything like this in our history. If the Bank of Ghana wants to recover from this loss… it will take them more than 45 years,”
Ghana- once touted as a rising economy success story in Africa finds itself in the worst financial crisis in generations as inflation soared to almost 50%, although now at 40.1% and deep in debt to the tune of $55bn.
This means the country will spend around 70% of its revenue on debt service going forward.
Allegations against the Bank’s management
The opposition National Democratic Congress (NDC) has accused the Governor and Deputies of the bank of fiscal recklessness and illegality.
They alleged the bank spent $762,000 on domestic and foreign travel- an 87% increase when compared to the figure for 2021.
The opposition also claims the bank spent around $250 million on a new office building according to the financial report of the bank.
Beyond that, the bank is also accused of lending the government about $ 700 million which the government has failed to pay back.
Although it is the lender of last resort, critics say the bank’s role has been abused by the administration of President Nana Kufo Addo in recent times.
The act establishing the bank states it must not lend more than 5% of the previous year’s fiscal revenue, anything beyond that is illegal. Martin Kepbu- a lawyer told the BBC
- “The time when they were printing billions for the government, didn’t they know that it will have repercussions?”
Current loan and credit outlook
Currently, the country has been able to secure a $3bn loan with the IMF spread across three years. Although this came with a lot of concessions which include- debt restructuring reducing its interest payment and increasing the tenure of its debt.
Fitch rates the country ‘CCC+’ for sovereign and B- for country ceiling, and the S&P Global ratings affirm Ghana’s credit rating as CCC+ with a stable outlook for 2023.
On the other hand, Moody affirms Ghana’s credit rating at Caa3 reflecting a weak credit rating for the country making investors and lenders cautious and reluctant to come to the country’s aid.
