A financial analyst, Scott Bolshevik, has accused government officials of engaging in the sale of state assets to maintain control over the country’s banking sector.
This accusation comes amidst concerns over the recapitalization strategies employed by the government to bolster the Central Bank’s financial stability.
In a post on the X platform, the economist indicated that Central Bank’s precarious financial position has allegedly prompted government officials to resort to unconventional methods to prop up its reserves.
You recapitalize a central bank when it's broke through debt and equity restructuring
— Scottbolshevik (@scottbolshevik) July 2, 2024
1. Sell bonds
2. Sell shares🚩
3. Sell bank of Ghana asset🚩
4. Print more money🚩
5. Profit retention
🚩 They may sell state assets to themselves to maintain perpetual control over the banks pic.twitter.com/ci6JibRCqo
The economist raised a red flag, highlighting the potential conflict of interest if government officials are indeed selling state assets to themselves, thereby perpetuating control over the banking sector.
Such actions, if substantiated, he said could undermine public trust in financial governance and raise broader concerns about transparency and accountability.
Calls for investigations into these allegations have intensified, with stakeholders demanding clarity on the fiscal and monetary policies driving these purported transactions.
The Governor of the Bank of Ghana (BoG), Dr. Ernest Addison, on Monday, July 1 unveiled plans for the central bank’s recapitalization, aimed at enhancing its credibility amidst ongoing financial challenges and structural reforms.
Dr. Addison revealed these intentions during a joint press briefing held in Accra, which was attended by officials from the Ministry of Finance and representatives of the International Monetary Fund.
Addressing the gathering, Dr. Addison stressed the imperative of recapitalization to support the anticipated reforms outlined in a forthcoming memorandum of understanding (MoU) between the Bank of Ghana and the Ministry of Finance.
The MoU, set to be finalized soon, seeks to address the central bank’s financial deficits, which amounted to GHS 10.5 billion in 2023 and GHS 60.9 billion in 2022.
“The recapitalization of the central bank will strengthen its credibility and enable it to effectively fulfill its mandate of managing monetary policy and ensuring price stability,” Dr. Addison stated.
He emphasized the need for resolute implementation of structural reforms throughout the year to restore the bank’s financial robustness and operational effectiveness.
The recapitalization strategy will encompass defining the requisite capital, establishing a timeline for the process, and identifying potential funding sources.
Dr. Addison underscored that these initiatives are pivotal in safeguarding the Bank of Ghana’s capacity to uphold its pivotal role in the country’s economic equilibrium.
In August 2023, Minority Leader Dr. Cassiel Ato Forson accused the government of contemplating a Bank of Ghana recapitalization levy on Ghanaian citizens.
He alleged that this levy aims to fortify the central bank, which he claims is facing imminent collapse due to mismanagement.
The National Democratic Congress (NDC) promptly called for the immediate resignation of BoG Governor Dr. Ernest Addison and his deputies, holding them accountable for the reported GH¢60 billion losses incurred in 2022.