Kwame Asare Bediako, widely known as A Plus, a musician and political activist, has demanded the resignation of the Bank of Ghana’s (BoG) leadership following a GH¢60 billion financial loss incurred in 2022.
Expressing strong criticism of what he perceives as mismanagement of public funds, A Plus drew parallels between the current BoG leadership and the heads of banks that were shut down during the previous banking sector cleanup.
In a Facebook post dated August 9, 2023, A Plus stated: “Some people mismanaged banks so you collapsed their banks and brought charges against them, but you have lost 60 billion of poor taxpayers’ money and you are still at post instead of c@m!ting su!c!de. Kwasea! If BoG can’t manage money, how do you expect Kwabena Duffour to be able to do that?”
Background:
The Bank of Ghana incurred a substantial loss in 2022, primarily due to the Debt Data Exchange Program (DDEP), as outlined in its 2022 Annual Report and Financial Statement, released in the previous month.
According to the report, the central bank restructured its holdings of government debt, and non-marketable holdings of Government of Ghana instruments, including long-term stocks and a Covid-19 Bond, underwent a 50 percent haircut.
Additionally, the Bank of Ghana’s other claims, such as holdings of marketable instruments, were exchanged under terms similar to those applied to other financial institutions as part of the DDEP.
These actions resulted in an impairment of GH¢48.40 billion in 2022.
Simultaneously, the Central Bank suffered revaluation losses on its foreign assets and liabilities due to exchange rate depreciation. These impairments and revaluation losses collectively led to a negative equity position of GH¢55.12 billion for the year 2022.
The report also indicated that despite a favorable trade surplus, the balance of payments registered a deficit of US$3.64 billion due to significant net outflows in the capital and financial account.
Consequently, there was a drawdown of US$3.46 billion in Gross International Reserves from US$9.70 billion at the end of December 2021 to US$6.24 billion at the end of December 2022, providing 2.7 months of import cover.
This substantial reserve reduction triggered significant currency pressures and caused a decrease in the Common Equity Tier 1 capital ratio from 6.5 percent to 5.5 percent, alongside an increase in the maximum Tier 2 capital ratio from 2.0 percent to 3.0 percent of total risk-weighted assets.