Bank of Ghana blames Gh¢60bn loss on DDEP, COCOBOD loans.
The Bank of Ghana (BoG), has blamed the GH¢60 billion loss incurred on the government’s Domestic Debt Exchange Programme (DDEP), and COCOBOD loans.
This loss stands in stark contrast to the profit of GH¢1.23 billion the bank achieved in the previous year (2021).
According to the Bank of Ghana, the losses were primarily attributed to the government’s domestic debt restructuring activities and the depreciation of the local currency, among other factors.
The BoG’s 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 exceeded its total assets by GH¢54.52 billion.
Explaining the factors that accounted for the loss in an interview on Point Blank on Eyewitness News, the Director of Research at the central bank, Dr Philip Abradu-Otoo, said shocks from the domestic debt restructuring had a toll on the operations of BoG.
He mentioned that this is the first time the Bank of Ghana had suffered this huge loss in the history of its operations.
“The central bank was making profits two-three years ago, last year, we made about GH¢1.2 billion of profits, but this year, it’s totally reversed and gone into a loss of GH¢60 billion. I don’t recollect BoG recording a loss in the past, this is the first time we are recording a massive loss. It’s a big deal.
“The reason for the loss is primarily due to the Domestic Debt Exchange Programme. Just as the banks suffered losses on their holdings of government instruments, the BoG also suffered a loss on its holdings of government instruments-marketable instruments and non-marketable instruments.
He stressed that “the impact of the DDEP on these two items, we incurred a loss of GH¢48.1 billion, we also had some loans to COCOBOD which were impaired as a result of the DDEP. DDEP impact that has swung our balanced sheet into negative territories”.
Amidst these developments, Dr. Abradu-Otoo expressed optimism that the government would provide capitalization to enable the central bank to recover from the losses.
He assured Ghanaians especially financial institutions that their monies with the BoG are safe explaining that the loss was not due to bad decisions.
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“What were are seeing on the balance sheets of BoG is not as a result of reckless policy, or bad decisions but the direct impact from DDEP. All is safe, carry on with your normal businesses,” he assured.
