The Bank of Ghana (BoG), in its 2023 annual financial report, revealed that the Domestic Debt Exchange Programme (DDEP) impacted its balance sheet.
Consequently, the bank signed a Memorandum of Understanding (MOU) to secure early recapitalisation in the medium to long term.
According to the report, this decision aligns with the second review of the ongoing International Monetary Fund (IMF) programme, which concluded on April 12, 2024.
A Memorandum of Understanding between the Bank of Ghana and the Ministry of Finance on the recapitalisation process is expected to be signed by the end of the third quarter.
The report highlighted several concerns for the Central Bank, including a loss of GH¢10.50 billion for 2023 and total liabilities exceeding total assets by GH¢65.36 billion.
To address these issues, the report outlined several measures the bank will implement to prevent further losses.
The measures include “refraining from monetary financing of the government’s budget. In this regard, the Bank will continue to adhere to the terms of the Memorandum of Understanding on zero financing of the budget signed between the Bank of Ghana and the Ministry of Finance on April 26, 2023.”
“The bank will continue with policy measures aimed at optimising the Bank of Ghana’s investment portfolio and operating cost mix to bolster efficiency and profitability” the report said.
The report also disclosed that the board of the bank expected that steadfast implementation of these policy steps, along with fiscal rectitude and continued maintenance of a tight monetary policy stance, would provide enough basis for continued operational policy efficiency and the existence of the bank.