TIG Post

Tag: BoG

  • BoG grants 15 brokers authorisation to operate in interbank FX market

    BoG grants 15 brokers authorisation to operate in interbank FX market

    The Bank of Ghana (BoG) has authorised 15 foreign exchange (FX) brokers to operate on the Ghana Interbank Foreign Exchange Market for the year 2025.

    This approval is in line with Section 3.13.1 of the Ghana Interbank Forex Market Conduct rules, which mandates both local and international FX brokers to obtain annual clearance to participate in the country’s forex market.

    Among the approved brokers for 2025 are IC Securities, SIC Brokerage, Black Star Brokerage, Serengeti Limited, Obsidian Acherner, Regulus, Sarpong Capital, Terika Financial Services Ltd, Laurus Africa, Shadeya International Investments Ltd, Savvy Securities, GFX Brokers, Crown Agents, CSL Capital, and StoneX Financial Limited.

    Crown Agents, CSL Capital, and StoneX Financial Limited are specifically designated as Cross-Border Payments and Financial Services Providers.

    The authorisations, effective from January 1 to December 31, 2025, are subject to strict post-approval conditions. According to a statement from the BoG:

    “The Bank of Ghana reserves the right to delist any authorised FX Broker for nonperformance or non-compliance with the Foreign Exchange Act 2006 (Act 723), the Interbank FX Market Conduct rules and the Post Authorisation Guidelines for Forex Brokers.”

    The BoG has underscored the need for all FX brokers to strictly adhere to the Ghana Interbank FX Market Conduct rules. Brokers are required to submit interim and end-of-day trading reports, maintain robust systems against cyber threats, and operate solely as intermediaries between banks without direct engagement with corporate entities.

    Failure to comply with these regulations may lead to sanctions, including the revocation of operating authorisation.

    For Cross-Border Payments and Financial Services Providers, the BoG has also imposed specific compliance requirements, such as maintaining accurate market-based pricing and meeting strict reporting obligations. Non-compliance with these conditions could result in similar penalties.

    This regulatory move by the Bank of Ghana highlights its commitment to ensuring a stable and transparent forex market while aligning with international best practices. The approved brokers and the regulatory conditions aim to foster confidence and discipline in Ghana’s interbank FX market.

  • BoG Governor projects inflation will fall to single digits by the first quarter of 2026

    BoG Governor projects inflation will fall to single digits by the first quarter of 2026

    Governor of the Bank of Ghana (BoG), Dr. Ernest Addison, has announced that the central bank expects inflation to drop to single digits by the first quarter of 2026.

    However, he mentioned that this projection depends on the economic policies and programs that the incoming John Mahama administration will implement in 2025.

    Dr. Addison shared this information during an appearance on Joy News’ PM Express Business Edition with host George Wiafe.

    In 2024, the BoG initially predicted inflation to end the year at 15%, but this forecast was later updated to 18%.

    By November 2024, inflation had slightly increased to 23% from 22.1% in October.

    Dr. Addison noted that inflation is expected to decrease due to the monetary policy actions taken by the BoG.

    “Based on the work that the Bank of Ghana has done in checking rising price levels through the inflation targeting policy, the inflation rate will slow down for this year (2025), he assured.

    “Inflation rate will hit 15 per cent by the end of 2025, from the current 23 per cent”, he assured.

    Dr. Addison explained that the increase in inflation was partly due to the election-related emotions and the uncertainty surrounding that period.

  • Salaries would’ve been withheld, no return on investment if not for DDEP – BoG Governor

    Salaries would’ve been withheld, no return on investment if not for DDEP – BoG Governor

    Governor of the Bank of Ghana (BoG), Dr. Ernest Addison, has revealed that salaries would have gone unpaid, and investment returns halted if not for the Domestic Debt Exchange Programme (DDEP).

    Speaking on Joy News’ PM Express Business Edition, Dr. Addison described the debt exchange as a critical intervention to avert national economic collapse during a severe crisis.

    “It was a life-and-death matter for all Ghanaians. At that point, nothing else mattered. Salaries were not going to be paid. There was going to be chaos because nobody was getting their investment returns,” he stated.

    He dismissed claims that the DDEP compromised the central bank’s independence, emphasizing it was a necessary response to the country’s financial challenges.

    “The debt exchange programme has nothing to do with the independence of the central bank,” he clarified.

    Dr. Addison detailed that the International Monetary Fund (IMF) had recommended a debt standstill, followed by the debt exchange initiative as part of efforts to restore stability.

    “The IMF’s approach to the crisis was clear. The Bank of Ghana had to continue financing the government to maintain stability while we worked on the programme.

    “At that point, those holding government instruments were the ones impacted. What happened in October during the debt standstill could have happened much earlier in the year, but it would have been disorderly without the appropriate policies in place. This was the solution given the situation the country found itself in.”

    Reaffirming the central bank’s autonomy, he stressed, “The recent economic challenges were about survival. Let’s not oversimplify the situation.”

    The DDEP, which concluded on February 10, 2023, recorded over 80% participation of eligible bonds.

  • BoG to activate MPCC if inflation surpasses 18% ±2% target – Report

    BoG to activate MPCC if inflation surpasses 18% ±2% target – Report

    The Bank of Ghana may activate the Monetary Policy Consultation Clause (MPCC) if the country fails to achieve the central inflation target of 18.0% +/- 2.

    Inflation spiked to 23% in November 2024, with a potential for a slight increase in December 2024.

    According to the terms outlined in the Monetary Policy Consultation Clause (MPCC) under Ghana’s ongoing International Monetary Fund (IMF) agreement, if the actual inflation rate falls outside the established outer bands on specific review dates, the MPCC will be triggered.

    This would initiate discussions with the IMF Board, with Ghanaian authorities presenting corrective measures to address the issue.

    “Given the revised central target of 18.0%, we estimate the upper outer band at 22.0%, above which the authorities would have to trigger the MPCC”, IC Research said in its macroeconomic update.

    “With the risk of overshooting the upper outer band, which would trigger the MPCC, we believe the Bank of Ghana opted for the aggressive FX [foreign exchange] sales to ensure a favourable pass-through of FX appreciation and contain inflation below 22.0% by end-2024”, it stated.

    Ghana’s Consumer Price Inflation continued its ascent in November 2024, as the persistent rise in food inflation overshadowed a modest decline in non-food inflation, intensifying price pressures across the economy.

    Headline inflation surged by 90 basis points to 23.0% year-on-year, defying analysts’ expectations of a slight dip in November 2024.

  • BoG rolls out stricter bancassurance regulations for financial sector shareholders

    BoG rolls out stricter bancassurance regulations for financial sector shareholders

    The Bank of Ghana (BoG) has released the bancassurance guidelines as an Exposure Draft, inviting feedback from the banking sector and the public, in accordance with the BoG’s Procedures for Issuance of Directives, 2020.

    BoG notes that bancassurance has experienced significant expansion worldwide, including across Africa, since the 1980s.

    This model allows banks and other financial institutions (BOFIs) to diversify their product offerings while earning supplementary revenue by using their existing distribution networks to collaborate with insurance firms.

    For insurance companies, this partnership provides an opportunity to expand their market reach and boost sales by utilizing the distribution channels of the BOFIs.

    “For customers, there is convenience, as BOFIs provide a one-stop-shop for all their financial needs including insurance products. In the case of Ghana, insurance companies have resorted to entering into partnership agreements with banks for the provision of Bancassurance products through the distribution channels of the latter”, the directive said.

    This model enables Regulated Financial Institutions (RFIs) to offer insurance products to their clients on behalf of an insurer, utilizing the RFI’s established distribution networks.

    Under this model, an RFI can partner with one life insurance company and one general insurance company. Customers, whether individual or retail, are given the freedom to choose their preferred product and insurer. Importantly, the model ensures that there is no sharing of risk between the RFI and the insurer.

    Additionally, the model aligns with the Bancassurance framework endorsed by the National Insurance Commission (NIC).

    “This Directive is therefore being issued to provide BOG’s regulatory expectations to the banking industry to ensure that inherent risks associated with the product is adequately managed by RFIs as well as to further smoothen and ensure a seamless implementation of the business of Bancassurance in Ghana between the banking and insurance sectors of the economy”, the BoG said.

    Regarding sanctions and corrective actions, the Bank of Ghana (BoG) stated that any Regulated Financial Institution (RFI) that fails to adhere to the stipulations of this Directive will be subject to an administrative penalty ranging from a minimum of two thousand penalty units to a maximum of ten thousand penalty units, as outlined in Section 92(8) of Act 930.

    Additionally, the BoG may impose other penalties or take any corrective measures deemed necessary, in accordance with the provisions of Act 930.

    “Without prejudice to the other penalties and remedial measures prescribed by Act 930, BOG may impose one or more of the following sanctions where any of the provisions herein are contravened:

    a. Suspend the RFI from engaging in Bancassurance business;

    b. Prohibit the RFI from further lending or taking further financial exposures, including investments, or capital expenditure;

    c. Restrict payment of bonuses or excessive compensation to the defaulting key management personnel or director; and d. Suspend defaulting person from office or declare that the relevant person is no longer a fit and proper person.

  • BoG to offer $120M in auction to BDCs in first quarter of 2025

    BoG to offer $120M in auction to BDCs in first quarter of 2025

    The Bank of Ghana (BoG) is set to conduct a foreign exchange auction of $120 million for Bulk Oil Distribution Companies (BDCs) in the first quarter of 2025, aimed at stabilizing the country’s fuel supply. 

    To facilitate this, the central bank has released a detailed auction schedule. The auction series will consist of six sessions, each offering $20 million, and will take place biweekly from January to March 2025. 

    The first auction is scheduled for January 14, with additional auctions on January 29, February 12, February 26, March 12, and March 26. 

    These auctions will be governed by the BoG’s established guidelines to ensure transparency and efficiency in the process.

    This initiative forms part of the BoG’s broader strategy to address foreign exchange demand pressures and stabilize the cedi, particularly within the downstream petroleum sector.

    In a press statement, the Bank of Ghana (BoG) emphasized that by providing Bulk Oil Distribution Companies (BDCs) with consistent access to foreign currency, the auctions are expected to facilitate the smooth importation of refined petroleum products, reduce supply disruptions, and promote price stability within the sector.

    “The Bank of Ghana announces for the information of all Authorised Foreign Exchange Dealing Banks, the Bulk Oil Distribution Companies (BDCs) FX forward Auction Calendar for the first quarter of 2025.

    “In accordance with the BDCs Forex Forward Auction guidelines, bids are invited as per the prescribed format to purchase United States Dollars against Ghana cedis, separately on each auction date and should be submitted via the dedicated email bogforwards@bog.gov.gh,” it added.

    Participants in the market, including authorized foreign exchange dealing banks and Bulk Oil Distribution Companies (BDCs), are required to submit their bids through the specified channels within the allotted timeframes. The outcomes of each auction will be disclosed on the same day, ensuring quick and clear communication with all relevant parties.

  • Total assets in banking sector surge by 3.4% to GHC367.2bn – BoG

    Total assets in banking sector surge by 3.4% to GHC367.2bn – BoG

    The Bank of Ghana (BoG) reports that total assets in the banking sector increased by 3.4% month-on-month to reach GHC367.2 billion in October 2024.

    This figure represents a significant 32.1% growth from January 2024, when total assets stood at GHC278.0 billion, underscoring the sector’s resilience and expansion over the year.

    The data, published in the BoG’s Summary of Economic and Financial Data – November 2024, highlights a steady month-on-month growth trajectory. Total assets rose from GHC316.0 billion in May to GHC328.1 billion in July and further to GHC355.0 billion in September before hitting the October peak.

    Similarly, total deposits, a critical component of the sector’s funding base, experienced consistent growth. Deposits increased by 3.4% month-on-month to GHC277.3 billion in October, up from GHC268.3 billion in September. From the year’s start in January, deposits surged by 27.3%, rising from GHC217.9 billion.

    Another key performance indicator, total advances, also exhibited significant growth. Advances grew by 3.2% month-on-month to GHC94.6 billion in October, up from GHC91.7 billion in September. Since January 2024, when total advances were GHC73.8 billion, the sector has recorded a substantial 28.2% increase.

    This steady rise reflects the banking sector’s growing role in financing economic activities, including businesses, households, and infrastructure projects, as well as growing public confidence in the financial system.

  • BoG reports $3.8bn trade surplus in October 2024

    BoG reports $3.8bn trade surplus in October 2024

    Ghana recorded a trade surplus of $3.8 billion by the end of October 2024, demonstrating sustained export growth despite global economic challenges.

    This milestone, highlighted in the Bank of Ghana’s November 2024 Summary of Economic and Financial Data, underscores the country’s resilience in maintaining a positive balance between exports and imports.

    The surplus was driven by strong performances in key export commodities, including gold, cocoa, and oil. Gold exports soared to $9.58 billion in October, up from $8.44 billion in September, marking a remarkable surge.

    Cocoa revenues also showed significant growth, increasing from $989 million in September to $1.15 billion in October, boosted by favorable global market conditions and improved supply chain efficiencies.

    Oil exports followed a similar trend, rising from $3.05 billion in September to $3.33 billion in October. Meanwhile, non-traditional exports contributed $2.45 billion, reflecting Ghana’s ongoing efforts to diversify its export portfolio.

    On the import side, total imports climbed to $3.68 billion in October, compared to $3.35 billion in September. Oil imports, a significant component, amounted to $8.99 billion by October, while non-oil imports reached $3.85 billion, indicating heightened domestic demand for goods and services.

    Despite the robust export performance, Ghana’s gross international reserves dipped slightly from $7.83 billion in September to $7.68 billion in October. However, the country maintained a stable import cover of 3.5 months, providing a crucial buffer against external economic shocks.

  • Value of MoMo transactions surge by GHC13.7 billion – BoG

    Value of MoMo transactions surge by GHC13.7 billion – BoG

    Data from the Bank of Ghana reports a significant increase in mobile money transactions, a proof of a significant hike in adoption of digital financial services nationwide.

    The total number of mobile money transactions increased from 705 million in September 2024 to 728 million in October 2024, indicating a substantial monthly increase.

    This growth was seen in the total value of transactions, which rose from GHS 284.9 billion to GHS 298.6 billion during the same period.

    However, the balance of float—the total funds held in mobile money accounts—experienced a decline, dropping from GHS 25.1 billion to GHS 24.2 billion.

    This surge in mobile money usage in October 2024 reflects favourable market dynamics, despite ongoing economic and regulatory hurdles, including calls for a reduction or elimination of the E-levy rate.

    Regarding mobile money interoperability, the total transaction value rose from GHS 2.5 billion to GHS 2.8 billion. The total number of interoperability transactions also increased, from 18.5 million to 19 million. Additionally, the transaction value of cheques cleared through mobile money grew from GHS 32.8 billion to GHS 38 billion, with the number of such transactions rising from 452,000 to 506,000.

    Meanwhile, the period also saw an increase in registered and active mobile money accounts. The number of registered accounts rose from 71.2 million to 71.9 million, while active accounts slightly increased from 23 million to 23.3 million. On the business side, while the number of registered Momo agents grew by 5,000 in one month—from 867,000 to 872,000—the number of active agents declined from 456,000 to 404,000.

    According to the report, the total transaction value under direct debit through the Automated Clearing House (ACH) increased from GHS 250.2 million to GHS 327.6 million, with the number of transactions rising from 53,000 to 84,000. Meanwhile, in terms of direct credit ACH transactions, the transaction value grew from GHS 10.3 billion to GHS 11.7 billion, and the total number of transactions increased from 785,000 to 874,000.

  • BoG’s inflation projections for 2025 shift amid mixed economic signals

    The Bank of Ghana’s latest assessment reveals a mixed outlook for Ghana’s economy, with inflation remaining a key concern. Inflation, initially expected to return to the 6–10% target band by the third quarter of 2025, is now forecast to stabilise within this range by the final quarter of the year. This adjustment reflects ongoing pressures from food and fuel price volatility, exchange rate fluctuations, and utility cost adjustments.

    Economic indicators suggest a recovery, with the Composite Index of Economic Activity recording a 2.2% annual growth in September 2024, reversing the contraction seen in 2023. Increased port activity, tourism, and private sector credit have contributed to this momentum. However, inflation remains a hurdle, with projections for 2024 averaging 20.1%, up from earlier estimates of 19%​​

    “Major drivers of the improvement in economic activity include increased port activity, households and firms consumption of goods and services , construction activities, credit to the private sector, and higher tourist arrivals. At the time of the last MPC meeting, average inflation forecast a year ahead which stood at 19.0 percent has increased slightly to 20.1 percent at this forecast round. The horizon for inflation to get back within the target band of 6 – 10 percent has slightly shifted forward to Q42025 from the original forecast period of Q32025,” the 121st MPC report stated.

    The International Monetary Fund (IMF) forecasts single-digit inflation by the end of 2025, marking a significant improvement from the current figures.

    The IMF also anticipates economic growth to accelerate from 2.8% in 2024 to 4.4% in 2025, buoyed by tighter monetary policy and structural reforms under the Extended Credit Facility programme. A Staff-Level Agreement expected to be approved this month is expected to pave the way for an additional $360 million disbursement before the end of the year, to hep bolster macroeconomic stability.

  • BoG maintains policy rate at 27% due to currency and inflationary pressures

    BoG maintains policy rate at 27% due to currency and inflationary pressures

    The Bank of Ghana’s (BoG) Monetary Policy Committee (MPC) has decided to keep the policy rate unchanged at 27%, they announced in a communiqué, an usual approach of often holding press briefings to announce such decisions.

    This follows a previous reduction from 29% in September 2024. The move is intended to stabilise inflation expectations and manage fluctuations in the exchange rate.

    The decision was made after the MPC assessed the latest economic conditions in the country.

    “Inflation projections show a slightly elevated profile driven by high and unstable food prices, pass-through of previous exchange rate pressures, fuel prices, and utility tariff adjustments. The price increases in food items have been steep in the course, and together with a fast-paced depreciating currency earlier on in the year, they have altered the inflation trajectory and stalled the disinflation process,” the MPC said in a press statement to announce the rate on Friday, November 29, 2024.

    According to the committee, it was observed that the upcoming elections and increased demand for foreign currency have temporarily caused the exchange rate to weaken, deviating from the country’s economic fundamentals.

    However, it expects the recent recovery of the cedi to continue as election-related uncertainties fade and the central bank boosts its foreign currency reserves.

    The committee also emphasised that current policies are aligned with the ongoing IMF program, highlighting the importance of addressing issues like the consistent depreciation of the cedi to prevent long-term inflation pressures.

    “At the time of the last MPC meeting, average inflation forecast a year ahead, which stood at 19.0 percent, has increased slightly to 20.1 percent at this forecast round. The horizon for inflation to get back within the target band of 6–10 percent has slightly shifted forward to Q42025 from the original forecast period of Q32025.

    In the near term, strengthening of the currency will augur well for future price developments. Under the circumstances, the Monetary Policy Committee decided to keep the policy rate unchanged at 27 percent,” the communiqué added.

    Inflation rose slightly in October 2024, reaching 22.1%, up from 21.5% in September. This increase was fuelled by higher prices for both food and non-food items.

    Although the government aims to reduce inflation to 15% by the end of the year, achieving this target seems challenging with just a month remaining and significant risks still in play.

  • BoG, forex bureau exchange rates for major currencies as at Nov 29

    BoG, forex bureau exchange rates for major currencies as at Nov 29

    Ghana’s local currency, the cedi, has strengthened against major currencies, especially the US dollar.

    As of November 29, 2024, the Bank of Ghana reported that the cedi is being bought at GH¢15.36 and sold at GH¢15.38 to the dollar.

    For the British Pound, the buying price is GH¢19.48 and the selling price is GH¢19.50. The Euro is being bought at GH¢16.21 and sold at GH¢16.22.

    According to checks by GhanaWeb Business at 10:00 AM on November 29, 2024, some forex bureaus are selling the US dollar for GH¢16.50, the British Pound for GH¢20.60, and the Euro for GH¢17.65.

    Despite this recent improvement, the cedi’s decline against major currencies in the past has added pressure to Ghana’s economy. To address this, the Bank of Ghana has sold more than 200 million dollars to stabilize the cedi. As a result, the exchange rate has improved from GH¢17.20 to GH¢15.90 to the dollar. This positive shift will likely help lower the cost of fuel and other goods in the country.

    See the Bank of Ghana and forex bureau rates below:

    Watch the latest edition of BizTech below:

  • Give incentivized loans for purchase of locally assembled cars – Volkswagen CEO tells BoG 

    Give incentivized loans for purchase of locally assembled cars – Volkswagen CEO tells BoG 

    The Chief Executive Officer of Volkswagen Ghana, Mr. Jeffery Oppong Peprah, has urged the Bank of Ghana to support key players in the automobile industry by introducing incentivised loan schemes for the purchase of locally assembled vehicles.

    Speaking at the launch of Volkswagen’s new product in Accra on November 28, 2024, Mr. Peprah emphasised that reducing interest rates on car loans could make locally assembled vehicles more accessible. 

    “Currently, when you go for a loan, you are paying about 30% interest rates, which is not affordable. We are appealing to the Bank of Ghana to implement a special incentive rate for locally assembled vehicles,” he stated.

    Car loan interest rates in Ghana are currently between 25% and 35%, significantly higher than in countries like South Africa, where rates typically range from 10% to 15%.

    Mr. Peprah believes that lower rates would encourage Ghanaians to purchase locally assembled vehicles, benefiting the economy.

    He also expressed support for Dr. Mahamudu Bawumia’s proposed credit scoring system, which he believes would allow locally assembling car companies to offer flexible payment plans. 

    This system, according to Mr. Peprah, would help assess buyers’ creditworthiness and facilitate salary deductions for loan repayments, enabling more individuals to afford new vehicles.

    In addition, Mr. Peprah highlighted the importance of integrating Ghana’s informal sector into the automobile industry to address the skills gap and improve industry standards.

    The event featured the launch of the Volkswagen Amarok, a vehicle designed for Ghana’s terrain, offering enhanced safety, power, and comfort tailored to local needs. 

    Key industry stakeholders attended the launch to review the new product’s features and discuss its potential impact on the market.

  • GHS11K to GHS45K gold coin launched by BoG

    GHS11K to GHS45K gold coin launched by BoG

    The Bank of Ghana (BoG) has officially launched the Ghana Gold Coin (GGC) as a new financial asset aimed at providing the public with more investment opportunities.

    As of November 26, 2024, the coins are available in three weights: 1.00 oz, 0.50 oz, and 0.25 oz, priced at GH₵45,020.48, GH₵22,409.74, and GH₵11,188.12, respectively.

    These prices are based on the previous day’s London Bullion Market Association (LBMA) PM gold price of $2,635.40 and the Bloomberg exchange rate of 15.7500 USD to GHS.

    Through this initiative, the BoG aims to offer the public an innovative investment option while enhancing the country’s portfolio of financial instruments.

    As part of the domestic gold program, the launch is designed to reduce excess liquidity in the market and strengthen the local currency against foreign currencies.

    This move is in line with the Bank of Ghana’s broader strategy to stabilize the economy and encourage investment in the nation’s gold reserves.

  • New BoG headquarters symbolizes the progress of our economy – Akufo-Addo

    New BoG headquarters symbolizes the progress of our economy – Akufo-Addo

    President Nana Akufo-Addo has described the newly commissioned Bank of Ghana (BoG) headquarters, “The Bank Square,” as a testament to Ghana’s economic progress and resilience.

    The 22-storey edifice, located at Ridge in Accra, comprises three main blocks: the Tower, Urban, and Amenities Blocks, including basements, podiums, and ancillary facilities.

    Speaking at the commissioning, President Akufo-Addo emphasized the building’s significance as a symbol of the country’s economic recovery and the effectiveness of monetary policies.

    “And as we stand here today, we are not only celebrating the physical structure of this imposing complex, we are also acknowledging the progress of our economy, which this edifice symbolizes,” he said.

    The President cited data from the BoG to highlight the strides Ghana has made in economic recovery.

    https://twitter.com/Channel1TVGHA/status/1859213195350581607/photo/1

    “Recent data from the Bank of Ghana paints a picture of resilience and promise. Ghana’s economy is on a recovery trajectory,” he stated. “The provisional GDP growth of 6.9% recorded in the second quarter of 2024 was driven by robust performances across all sectors. Non-Oil GDP growth of 7%, a testament to the dynamism of our economy.”

    He further noted the sharp drop in inflation from 54.1% in December 2022 to 22.1% in October 2024 as evidence of effective monetary policy interventions.

    “There is every indication that the downward trend of inflation will continue. Evidence in the reducing prices of foodstuff and petroleum prices brings a sense of optimism for the future,” he added.

    BoG Governor Dr. Ernest Addison, in his remarks, described “The Bank Square” as a key step in modernizing the central bank’s operations, enhancing employee wellness, and promoting sustainability.

    “The Bank Square was designed with the future in mind and stands as one of the most important modern civic landmarks in the city of Accra and the country,” he said.

    Dr. Addison also emphasized the edifice’s role in solidifying Ghana’s position as a financial leader in Africa.

    “By commissioning this product of the imagination of an internationally celebrated architect, Sir David Adjaye, a proud son of Ghana, we are boldly affirming our commitment to investing in the nation’s future. His architectural firm, Adjaye Associates, has created this enduring masterpiece—one designed to withstand the test of time and serve as a beacon of Ghana’s revitalization for generations to come.”

    Controversies and Public Scrutiny

    The $250 million project, which began in 2019 following a directive from the BoG Board during its 662nd Regular Meeting, has faced significant criticism. The Minority in Parliament, led by Bawku Central MP Mahama Ayariga, raised concerns over the project’s cost escalation, alleging a lack of approval from the Public Procurement Authority (PPA). Ayariga submitted a formal petition to the Office of the Special Prosecutor for investigation.

    Although the status of the investigation remains unclear, the facility’s commissioning marks a milestone for Ghana’s financial sector. According to President Akufo-Addo, the edifice reflects progress in economic indicators and a commitment to building a resilient and dynamic economy.

  • BoG’s $250m headquarters sees the light of day despite opposition

    BoG’s $250m headquarters sees the light of day despite opposition

    As announced last year by the Bank of Ghana (BoG), its new headquarters, a 21-story structure situated in Ridge, has been completed and was commissioned by President Akufo-Addo today.

    The project costing $250 million consists of three main blocks namely the Tower, Urban and Amenities Blocks including basements, podium and ancillary
    facilities.

    At Wednesday’s event, BoG Governor, Dr. Ernest Addison emphasised that the primary objective of the new headquarters is to streamline the bank’s activities by consolidating its multiple offices scattered across Accra under one roof.

    “As you may be aware, the Bank of Ghana has multiple offices in the city of Accra and with a strategic plan to harmonise all these operational units at the headquarters under one roof. This new head office provides us with the opportunity to better streamline our operations, improve communication, reduce cost and create the needed synergies for efficiency.

    “The Bank Square was designed with the future in mind and stands as one of the most important modern civic landmarks in the city of Accra and for that matter, our nation. This building will play a pivotal role in shaping Ghana’s identity as a leading force in Africa’s financial ecosystem,” he said.

    Plans to construct the eddifice met stern public criticism, especially from the Minority in Parliament. A formal petition from Bawku Central MP, Mahama Ayariga, who raised concerns about the substantial increase in project cost without approval from the Public Procurement Authority (PPA) was presented to the Office of the Special Prosecutor for probing.

    It is unknown the current state of the investigations; however, the facility was commissioned today.

    Work on the new head office commenced in 2019 after the Board of the Bank at its 662nd Regular Meeting directed the Corporate Management and Services Department (CMSD) of the Bank by a decision dated 18th December 2019 to initiate all proper processes for its development.

    Following the directive, the Bank noted that it went through the required processes to acquire a parcel of land at West Ridge, which was previously owned by State Insurance Company (SIC).

    The land was compulsorily acquired by the Government of Ghana by Executive Instrument, 2020 E.I 304 for the New Bank of Ghana Headquarters, a building of national interest. The compulsory acquisition process started in 2019 and the Executive Instrument was published and gazetted in 2020.

    Approval from Public Procurement Authority

    The Central Bank then wrote to the Public Procurement Authority (PPA) on January 14, 2020, for approval to use the Restricted Tender Method. This procurement method was on the basis of national security considerations.

    The following firms, known to be operating in Ghana, were shortlisted: MAN Enterprise, WBHO Ghana Ltd, De Simone Ltd, Goldkey Properties Ltd., and Ronesans Construction.

    Subsequently, tenders were opened on June 19, 2020, at 11am and were later evaluated between July 6 and 17, 2020.

    After evaluation of tenders were received, the Entity Tender Committee (ETC) of the Bank at its meeting held on August 6, 2020 considered Tender Evaluation Panel’s recommendation and approved the award of contract for the project to Messrs Goldkey Properties Limited at the cost of $121,078,517.94.

    The PPA later revised the initial approved estimated amount from USD81,882,640.00 to USD121,078,517.94.

    Following this, the Central Tender Review Committee (CTRC) on September 4, 2020, granted concurrent approval to the Bank to engage the recommended Tenderer, Messrs. Goldkey Properties Limited, at a contract price of USD121,078,517.94.

    Commencement of work

    The project site was formally handed over to the contractor in March 2021 for commencement of preliminary site works and designs.

    Later on, there was a review of the design, prompting the ETC of the Bank at its meeting held on 19th December 2022 to revise the project cost of USD2,068.00/m2.

    CTRC subsequently granted concurrent approval for the revised scope of works at cost of USD2,068.00/m2 on 17th January 2023.

  • We’re committed to swiftly resolve concerns raised by BoG – CBG

    We’re committed to swiftly resolve concerns raised by BoG – CBG

    Consolidated Bank Ghana (CBG) has reaffirmed its dedication to collaborating with the Bank of Ghana to reinstate its temporarily suspended foreign exchange trading license.

    “We believe the concerns raised in the notice can be swiftly resolved and are committed to working closely with the Bank of Ghana to ensure compliance,” the CBG said in a statement issued to the Ghana News Agency on Thursday.

    The CBG stated: “We want to reassure our valued customers that this suspension does not impact CBG’s normal banking operations. Except for foreign exchange products and services, all our branches and digital platforms will continue providing customers with our full range of services.

    “We fully expect to restore foreign exchange products after our engagement with the Bank of Ghana or on expiry of the suspension period.”

    “We apologise unreservedly for any inconvenience this situation may have caused and reaffirm our dedication to maintaining the highest standards of operational compliance across all aspects of our business.”

    The CBG added that it valued its stakeholders and remained committed to providing them with “a simple, secure and differentiated banking experience”.

    The Bank of Ghana is temporarily suspending the foreign exchange trading license of Consolidated Bank Ghana, effective from November 26, 2024, for a period of one month, due to violations of Section 11(2) of the Foreign Exchange Act, 2006 (Act 723).

  • BoG to impose GHS12,000 penalty on Banks, SDIs for breaching outsourcing regulations

    BoG to impose GHS12,000 penalty on Banks, SDIs for breaching outsourcing regulations

    In order to strengthen governance and risk management standards, the Bank of Ghana has introduced a comprehensive outsourcing directive that applies to banks, specialized deposit-taking institutions (SDIs), financial holding companies, and development finance institutions.

    In an effort to improve oversight in an industry increasingly reliant on outsourced functions, the directive mandates full compliance by July 1, 2025.

    Should institutions fail to comply, they will face an administrative penalty of 1,000 penalty units, or GH₵12,000.

    This directive emphasizes the Bank of Ghana’s dedication to preserving the financial system’s integrity by limiting the outsourcing of key functions.

    Restricted roles include high-level decision-making positions, such as those of board and senior management, along with credit decision-making, anti-money laundering, customer verification, as well as critical risk management and cybersecurity roles.

    Any function deemed essential to a regulated financial institution (RFI) must be maintained in-house to prevent conflicts of interest and mitigate risks linked to outsourcing sensitive activities.

    Recognizing the need for flexibility, the directive allows banks to outsource non-core functions without prior approval, provided they notify the Bank of Ghana 10 days before engaging the service provider.

    The directive also requires financial institutions to assess the materiality of functions they intend to outsource, distinguishing between core and non-core activities to maintain central oversight of critical operations.

    By June 2, 2025, institutions must submit these assessments to the Bank of Ghana and make necessary adjustments by the deadline or at contract renewal, whichever occurs first.

    The directive clarifies that specific partnerships—such as those with payment card networks (e.g., Visa, Mastercard) and clearing and settlement partners—are exempt from outsourcing classification.

    Nevertheless, for any outsourcing agreements involving core functions, written approval is compulsory in line with section 60 (12) of Ghana’s Act 930, which governs banks and SDIs.

    Additionally, the Bank of Ghana has underscored the importance of data protection, requiring that customer information not be shared with third-party providers without explicit customer consent.

    With a focus on strategic, reputational, and operational risks, the new regulations aim to ensure that outsourced arrangements do not jeopardize the stability of RFIs.

    4o

  • New BoG headquarters worth $250m to be opened by Akufo-Addo on Nov 20

    New BoG headquarters worth $250m to be opened by Akufo-Addo on Nov 20

    The Bank of Ghana (BoG) will officially open its new US$250 million headquarters, “The Bank Square,” in Accra on November 20, 2024.

    The construction of the new headquarters sparked debates last year, especially after the Central Bank reported losses amounting to GH¢60 billion in 2022.

    Reports revealed that the bank invested around US$250 million in the project.

    Many National Democratic Congress legislators and some Ghanaians questioned the necessity of the project, particularly given the bank’s financial losses.

    However, the Central Bank explained that the current building could not withstand natural disasters like earthquakes.

    The bank also emphasized that halting the project was not feasible due to the costs already incurred.

    In response, Stephen Opata, Special Advisor to the BoG Governor, stated, “The project was already far along. Halting it at that stage would not have been the most prudent choice.”

    President Nana Addo Dankwa Akufo-Addo will attend the ceremony as the special guest of honor, which will begin at 10 am. The event will be by invitation only.

  • CBG’s forex trading licence suspended by the Bank of Ghana

    CBG’s forex trading licence suspended by the Bank of Ghana

    Bank of Ghana has suspended the Foreign Exchange Trading Licence of Consolidated Bank Ghana (CBG) for one month, effective November 26, 2024.

    Citing Section 11(2) of the Foreign Exchange Act, 2006 (Act 723), the BoG explained in a November 12 statement that this decision was due to repeated violations of foreign exchange market regulations by CBG.

    GuidelinesThe other breaches include “Updated Guidelines for Inward Remittance Services for Payment Service Providers dated November 2023 and the Anti-Money Laundering/Combating the Financing of Terrorism & The Proliferation of Weapons of Mass Destruction (AML/CFT&P) Guideline, for Accountable Institutions in Ghana dated December 2022, which have come to the attention of the Bank of Ghana.”

    The Bank of Ghana (BoG) has stated that CBG’s licence will be reinstated after the one-month suspension period, contingent on CBG implementing effective measures to ensure full compliance with foreign exchange market regulations.

    The BoG also issued a reminder to all participants in the foreign exchange market to adhere strictly to the established forex regulations and guidelines.

  • BoG instructs financial institutions to quit partnership with Taptap Send on Remittance Termination

    BoG instructs financial institutions to quit partnership with Taptap Send on Remittance Termination

    The Bank of Ghana (BoG) has instructed all financial institutions, including commercial banks and Enhanced Payment Service Providers, to cease their Remittance Termination Partnership with the global remittance company, Taptap Send.

    This directive was communicated in a letter addressed to all banks, Dedicated Electronic Money Issuers, Enhanced Payment Service Providers, and the Ghana Interbank Payment and Settlement System (GhIPSS).

    According to the BoG, this action, effective from November 8, 2024, will be in place for one month.

    The BoG explained that the decision was made because Taptap Send was operating a Cedi Remittance Wallet, which is against the country’s Foreign Exchange Act.

    The central bank also noted that this operation violated the updated guidelines for inward remittance services. The BoG emphasized that the law requires foreign currencies to be deposited into the accounts of banks and institutions in Ghana, with the cedi equivalent then credited to the receiver in Ghana.

    “The Foreign Exchange Act 3 (1) states that a person, shall not engage in the business of dealing in Foreign Exchange without the a licensed issued under this Act,” it said.

    Bank of Ghana warning to other institutions

    The BoG has issued a strong warning, stating that it will impose severe sanctions on any institution that violates the laws.

    They expressed the hope that this action will serve as a significant deterrent to other institutions in the remittance space, ensuring compliance with the country’s Foreign Exchange Act.

    Taptap Send and Competition in the Remittance Space

    Taptap Send has recently become the preferred choice for many individuals sending money to Ghana.

    This preference is largely due to its mobile-based platform and competitive pricing compared to other remittance service providers.

    Taptap Send is an app that enables people to send money worldwide at a very low cost.

    It has been recognized by industry experts as one of the fastest-growing mobile remittance services globally.

    Taptap Send is a venture-backed start-up with investors such as Reid Hoffman, the Omidyar Network, and Helios.

    The company is known for hiring top talent from leading tech companies, professional services firms, and industry giants, including Twitter, Yahoo, Uber, Amazon, McKinsey, Bain & Co, Deloitte, KPMG, Cravath, and Vodafone.

  • BoG suspends Taptap Send’s services with banks over regulatory breaches

    BoG suspends Taptap Send’s services with banks over regulatory breaches

    The Bank of Ghana has imposed a one-month suspension, effective November 8, 2024, on Taptap Send’s partnerships with payment service providers and commercial banks.

    This action stems from Taptap Send’s operation of a cedi remittance wallet, which the BoG states breaches the Foreign Exchange Act of 2006 and regulations governing money transfer services.

    The Bank’s statement pointed out that Taptap Send violated Section 3(1) of the Act, which prohibits unlicensed engagement in foreign exchange operations.

    Quoting the law, the BoG emphasized, “A person shall not engage in the business of dealing in foreign exchange without a licence issued under this Act.”

    In addition to this violation, Taptap Send failed to meet requirements set forth in the Updated Guidelines for Inward Remittance Services, which include timely crediting of local accounts and full compliance with anti-money laundering (AML) and counter-terrorism financing (CFT) standards.

    According to the Bank, “Paragraph 7(d) and (e) of the Updated Guidelines for Inward Remittance Services for Payment Service Providers” obligates settlement banks to enforce AML/CFT compliance and report any suspicious activity.

    “Paragraph 7(d) and (e) of the Updated Guidelines for Inward Remittance Services for Payment Service Providers clearly stipulates that the settlement bank shall “not honour any request other than for payment to beneficiaries and report any violation or suspected violation to the Bank of Ghana” and “ensure that all AML/CFT requirements are satisfied for all settlement accounts regarding inflows and outflows,” the statement added.

    The BoG underscored the importance of these regulations in maintaining the integrity of Ghana’s financial system, warning that further violations would result in more severe penalties.

  • BoG suspends Taptap Send partnerships with EPSPs, banks over illegal cedi remittance operation

    BoG suspends Taptap Send partnerships with EPSPs, banks over illegal cedi remittance operation

    The Bank of Ghana (BoG) has issued a one-month suspension of all partnerships between Taptap Send and electronic payment service providers (EPSPs) and commercial banks in Ghana, effective November 8, 2024.

    The regulatory action comes in response to Taptap Send’s operation of a cedi-denominated remittance wallet, which BoG states is in violation of section 3(1) of the Foreign Exchange Act, 2006 (Act 723), as well as sections 7(b), 7(d), and 7(e) of the Updated Guidelines for Inward Remittance Services for Payment Service Providers.

    According to the Bank of Ghana, Taptap Send’s actions contravene local laws governing foreign exchange and inward remittance operations. Under section 3(1) of the Foreign Exchange Act, 2006 (Act 723), engaging in foreign exchange transactions without the necessary license is prohibited.

    In addition to breaching the Foreign Exchange Act, Taptap Send is also accused of disregarding key provisions of the Updated Guidelines for Inward Remittance Services, which are intended to ensure efficient and transparent remittance practices among EPSPs and their partner banks. Specifically, paragraph 7(b) of these guidelines requires partner banks to credit the local settlement accounts of designated electronic money issuers (DEMI) or EPSPs with the cedi equivalent of inward remittances within 24 hours to ensure timely distribution to beneficiaries.

    Further violations were noted in paragraphs 7(d) and 7(e) of the guidelines, which direct settlement banks to refrain from processing requests for any other purposes than payments to beneficiaries. Additionally, banks are mandated to notify BoG of any suspected breaches and to maintain stringent anti-money laundering and counter-financing of terrorism (AML/CFT) compliance protocols. According to BoG, Taptap Send’s practices raised concerns that necessitated immediate intervention.

    The suspension comes with a strong warning from BoG to other institutions, indicating that further violations of remittance and foreign exchange regulations will be met with severe sanctions. The central bank emphasized its commitment to safeguarding Ghana’s financial system by strictly enforcing regulatory compliance among financial service providers.

    Taptap Send, a prominent digital remittance platform with investors including Reid Hoffman, the Omidyar Network, and Helios is expected to cooperate with regulators to address these issues to restore its operational partnerships in Ghana.

  • BoG urged to improved management of dormant accounts, access to deceased’s funds

    BoG urged to improved management of dormant accounts, access to deceased’s funds

    The Bank of Ghana (BoG) is set to issue new directives to all commercial banks to enhance the process of identifying and accessing dormant accounts belonging to deceased individuals, including a major change to how Next of Kin (NOK) are involved in account opening procedures.

    This comes after the Institute for Liberty and Policy Innovation (ILAPI), uncovered the huge sums of money sitting in a large number of dormant accounts with the Bank of Ghana (BoG).

    Thus, the ILAPI has urge BoG to come up with a policy aimed at reducing delays and eliminate identity issues when tracing the rightful beneficiaries of unclaimed funds.

    “To avoid prolonged investigations and identity crises, we will now require that the Ghana Card of the Next of Kin be presented during account opening. This measure will help reduce the time taken to identify the rightful heirs of dormant accounts, ensuring smoother and more efficient processes when individuals pass away,” the ILAPI said.

    Under the current system, many families of the deceased face challenges in accessing funds from dormant accounts due to lengthy verification processes, which often lead to frustration and financial distress.

    The ILAPI emphasized the importance of transparency in managing dormant accounts, calling for more clearly defined policies and a public-facing report.

    “We also believe that there should be clearly defined policies around the management of dormant accounts, and we plan to release an annual report on the funds, making it part of BoG’s annual statements. This will ensure transparency, enhancing the public’s confidence and trust in how these funds are managed.”

    The new directives also recommend revising the current law that restricts BoG from tracing the families of deceased account holders. At present, BoG is not permitted to take proactive measures to contact families to release dormant account funds, but under the proposed policy change, this would be allowed.

    “We are pushing for a review of the law that will allow the Bank of Ghana to trace the families or next of kin of dormant account holders. This will ensure that the funds are properly allocated to the rightful heirs, particularly in cases where they might not be aware of the funds left behind,” the report added.

    Another important recommendation from the BoG’s proposed policy is the integration of the national identification system. The BoG intends to collaborate with local government bodies to create a more efficient way of identifying beneficiaries.

    “By tapping into the national identification system, we can work with local government bodies to quickly identify the families of the deceased, ensuring they receive the funds owed to them,” Dr. Osei explained.

    ILAPI (Institute for Liberty and Policy Innovation), which has been pushing for reforms in the handling of dormant accounts, has supported these recommendations. According to a report from ILAPI, a significant amount of money is tied up in dormant accounts, some of which could potentially improve the lives of those who were financially dependent on the deceased. The organization has long argued for a more proactive and transparent approach in managing unclaimed funds.

    “In some cases, these funds could have taken families out of poverty, providing education and economic stability for children and spouses. It is frustrating to know that these funds remain inaccessible due to bureaucratic hurdles,” said the ILAPI.

    “The policies being proposed by the BoG are a welcome step toward ensuring that these funds are not locked away indefinitely.”

    One of the final suggestions is that BoG impose a time limit on how long unclaimed dormant funds can be held before they are transferred or released.

    “There should be a set number of years after which the BoG can retain the funds, after which they must take action, whether that means transferring the funds to the state or making them available for family claims. A clear policy and system for handling these funds should be implemented to avoid prolonged uncertainty.”

    As the Bank of Ghana moves forward with these proposals, there is hope that they will create a more efficient, transparent, and supportive system for families who stand to benefit from the funds left behind by their loved ones. The next steps for the BoG include consulting with various stakeholders and initiating the policy framework to be rolled out in the coming month

  • Dormant accounts worth over GH167. 8m, $14.6m, £ 2.4m with BoG – ILAPI report

    Dormant accounts worth over GH167. 8m, $14.6m, £ 2.4m with BoG – ILAPI report

    A large sum of money has been reported by the Institute for Liberty and Policy Innovation (ILAPI) to be sitting in dormant accounts at the Bank of Ghana (BoG) for the past 8years.

    The report indicates that the Bank of Ghana (BoG) holds over GH₵167.8 million in local currency and more than US$14.6 million in dormant accounts.

    Additionally, there are over £2.4 million and €2.3 million accumulated between 2016 and 2023. Furthermore, between 2021 and July 2024, the number of dormant accounts transferred to BoG has reached 1,448,660.

    This information was revealed in a document provided to the Institute for Liberty and Policy Innovation (ILAPI) by the BoG, following a petition requesting a detailed report on the sums collected from inactive accounts over the last eight years (2016–2024). ILAPI’s Next of Kin (NOK) project has been ongoing since 2023.

    The NOK initiative aims to establish a point of contact for beneficiaries to access funds left by deceased individuals at financial institutions, going beyond the legal framework.

    According to ILAPI’s report, they suspect that some of these funds could belong to individuals who died in road accidents, floods, or other incidents, with many families unaware of their existence.

    These funds, which could have helped children, spouses, and families escape poverty, remain with the regulated financial institutions and the BoG, due to the accounts being classified as dormant.

    The report also pointed out that the law does not allow BoG to trace family members to help them access the funds of the deceased.

    It’s crucial to note that some of these beneficiaries relied on their deceased relatives for education and financial support. The inability to access these funds forces them to drop out of school and struggle to survive, potentially pushing them into poverty and social issues.

    “It is also evidence that the Bank of Ghana has made strides in educating the public on the importance of appointing a next of kin and the relevance of next of kin on financial documents, which is commendable. Nevertheless, more proactive measures are needed to understand that countless families face financial constraints, and the failure to claim the funds of the dead only exacerbates the poverty levels among families in Ghana,” it said.

    The report further urged the central to go beyond its ongoing literacy campaigns and actively engage in identifying and contacting the beneficiaries and Next of Kin by amending its laws and policies.

    “BoG to issue directives to all banks that the Ghana Card of the Next of kin during account opening should be requested to eschew identity crises and reduce the long timelines during the investigations on the dead.  Clearly defined policies on the management of dormant accounts and transparency on how these funds are managed should be made available to the public to enhance confidence and trust. A review of the law to allow BoG trace families, next of kin of dormant account.”

    “An annual report on dormant accounts and funds received could be released or be a part of the BoG’s annual reports. BoG should also use the national identification systems, and collaborate with local government bodies to identify beneficiaries or the next-of-kin of dormant accountholders. Unclaimed funds of dormant accounts should have a specific number of years the BoG could keep. A policy should be considered to trace families to access funds through recognized administrative and legal processes with a harmonized system.”

  • We have enough reserves in place to stabilize cedi – BoG

    We have enough reserves in place to stabilize cedi – BoG

    The Bank of Ghana (BoG) is reinforcing its foreign exchange reserves to help stabilize the cedi as demand for foreign currency is expected to increase with the festive season approaching.

    This move aims to address the depreciation of the cedi against major currencies, currently trading at about GHS 17 per dollar, reflecting a 24.3% decline so far this year.

    Dr. Ernest Addison, Governor of the Bank of Ghana, highlighted that bolstering reserves is a crucial step toward reducing exchange rate volatility and enhancing economic stability.

    “Some are praying that the cedi will recover to GHS 10.00 to a dollar. These are the problems in our economy, the issues about the exchange rate and financial sector issues. But I think the good news is that we are making progress because the developments we are seeing are not different from other jurisdictions.

    “So, we need to stay focused and implement the appropriate policies and build buffers to be able to support the progress we have made.”

    He emphasized that the Bank’s strategy is not only aimed at reinforcing the local currency but also at building investor confidence and ensuring overall economic stability.

    “We have $7 billion dollars in foreign exchange reserves. If I want to drive the dollar-cedi rate at GHS 10, I can do that tomorrow. But what about the day after tomorrow? So, we are balancing various factors, trying to build reserves and managing the exchange rate. So, all is not lost yet, there is some silver lining in the cloud, hopefully we will see the appreciation of the currency”, Governor Addison added.

    Dr. Addison shared these insights at the launch of The Concise Law of Banking, authored by legal practitioner Afua Appiah-Adu and commissioned by the Institute for Law & Development (ILAD).

    This comprehensive guide to banking law covers core topics relevant to students, banking professionals, and legal practitioners, including: Bank Regulation, Supervision, and Licensing; Banker-Customer Relations; Electronic Payment Systems; Money Laundering; Credit Reporting; and Borrowing and Lending in Banking.

  • BoG has accumulated significant reserves to meet dollar demand – Finance Minister

    BoG has accumulated significant reserves to meet dollar demand – Finance Minister

    The Finance Minister, Dr. Mohammed Amin Adam, has assured businesses and market stakeholders that the Bank of Ghana (BoG) has accumulated significant dollar reserves to meet market demand.

    Speaking at a press briefing in Washington, D.C. during the Annual IMF and World Bank meetings, Dr. Amin Adam emphasized that the current reserve levels should reassure those concerned about foreign exchange availability.

    “We should look at the current reserve position of the Bank of Ghana, and that should give everyone some comfort about its ability to meet market demand,” he stated. By the end of August 2024, Ghana’s international reserves reached $7.5 billion, according to BoG data.

    Dr. Amin Adam also highlighted expected inflows that could further stabilize the cedi. Ghana anticipates a $360 million disbursement from the IMF in December, pending the approval of the third program review. Additionally, a $300 million disbursement from the World Bank under its Development Policy Operations (DPO) Series is expected, further boosting foreign currency reserves.

    “These expected inflows, in addition to what the Bank of Ghana already has, should help in stabilising the cedi going forward,” the finance minister remarked, addressing recent concerns over forex fluctuations.

    The cedi has recently come under pressure, with some forex bureaus reportedly selling the dollar above GHS17, despite BoG’s data indicating rates below GHS16. Analysts attribute this volatility to increased dollar demand as businesses prepare to finance Christmas imports and restock for next year, fearing potential depreciation. Speculation surrounding the upcoming December elections has also driven up foreign currency demand.

    In response, the BoG has actively intervened to meet dollar demand through its dollar auction program, targeting Bulk Oil Distribution Firms and conducting weekly auctions for commercial banks to maintain a steady supply. These measures form part of a broader strategy by the BoG to stabilize the cedi and manage market uncertainty, aiming to minimize the currency’s depreciation amidst fluctuating market dynamics.

  • Phase 2 of DDEP had limited effect on 2023 Financial Performance – BoG

    Phase 2 of DDEP had limited effect on 2023 Financial Performance – BoG

    The Bank of Ghana has disclosed in its 2024 Financial Stability Review that Phase 2 of the Domestic Debt Exchange Programme (DDEP) had a relatively low impact on the audited financial performance of banks in 2023.

    This outcome is attributed to lower levels of holdings and improved restructuring terms. Additionally, some impairments had already been accounted for by banks in 2022, and they generally reported a strong rebound in financial performance in 2023.

    The report highlighted that the Government of Ghana negotiated and restructured bond holdings of pension funds amounting to GHS30.01 billion in August 2023. Looking ahead, the report indicated that external debt restructuring, particularly concerning Eurobonds, could lead to further impairments for banks and other participating financial institutions.

    To address potential impacts from the government’s debt operations, the report noted that regulatory relief measures implemented by financial sector regulators, the execution of recapitalisation plans, and the establishment of the Ghana Financial Stability Fund will help mitigate risks in the financial sector.

    Furthermore, the Financial Sector Strengthening Strategy (FSSS), developed in 2023, aims to coordinate regulatory interventions to swiftly identify and address risks to the financial system.

    On a positive note, the report emphasized that domestic debt restructuring has created some fiscal space for the government and contributed to a reduction in the debt-to-Gross Domestic Product ratio. The second phase of the DDEP was launched on July 14, 2023, involving the restructuring of Cocoa Bills (GH¢8.1 billion) and locally issued US dollar-denominated bonds ($808.99 million).

  • Bright Simons fights BoG’s plan to build a corporate office in Tamale

    Bright Simons fights BoG’s plan to build a corporate office in Tamale

    Honorary Vice-President of civic group IMANI Africa, Mr. Bright Simons, has expressed confusion over a new tender issued by the Bank of Ghana (BoG) for the construction of a corporate office in Tamale, following the Auditor General’s report last year that flagged a significant increase in BoG’s foreign exchange payments, partly attributed to the same project.

    An excerpt from the Auditor General’s report pointed out by Simons indicates that BoG had already spent a significant portion of foreign exchange payments—over $84 million—on this same project in 2022.

    The report attributes 30.7% of the total payments of $117 million to the construction of the Tamale office, alongside infrastructure for the African Games.

    The recent tender issued by BoG, with a deadline of September 5, 2024, calls for the construction of a corporate office in Tamale.

    Upon discovering this new tender, Simons raised questions as to why another tender is being issued for a project that was supposedly already accounted for in the previous payments.

    “If such substantial payments were already allocated to the project, why is a new tender being issued in 2024 for the same office? Was the previous funding used effectively, or is there a gap in the project’s completion and accountability?” were some of the questions he raised.

    To this end, Bright Simons has expressed his concerns, stating, “Last year, the Auditor General flagged a big increase in Bank of Ghana forex payments of more than $84m. One of the reasons given was that a new corporate office in Tamale was being built. Imagine then my confusion seeing a new BoG tender to build a corporate office in Tamale.”

  • Being named as a next of kin doesn’t mean you inherit the account – BoG clarifies misconceptions

    Being named as a next of kin doesn’t mean you inherit the account – BoG clarifies misconceptions

    Next of kin, is simply a nominee designated by the account holder, serving as the main contact if the bank cannot reach the account holder according to Bank of Ghana (BoG).

    This implies that the next-of-kin designation in banking is meant for locating the account holder, not for determining who inherits the account.

    “This person should be close and know a lot about the account holder, and that is why in practice, many people would use some of their close relatives, Mr. Augustine Amoako Donkor, Assistant Director, Financial Stability Department of BoG, has said.

    He was speaking on the topic, “The Next-of-Kin Concept,” as part of a two-day media capacity building workshop for selected journalists in the Ashanti Region.

    The workshop, which sought to deepen the understanding of participants in the operations of BoG and also build their capacity in financial reporting, was attended by 25 journalists.

    Resource persons from the Central Bank took them through microeconomic analysis and significance of microeconomic indicators, monetary policy practice in Ghana, inflation dynamics in Ghana, developments in foreign exchange market, as well as interpretation of the Monetary Policy Committee Pack.

    Mr. Donkor said a customer of a bank reserves the right to choose even a friend who knows much about him/her as the next of kin because the main purpose is to have someone who can provide information on why the account holder is not reachable.

    Processes to retrieve funds in the account of a deceased customer, according to him, is entirely a different issue when it is established that the owner of the account has indeed died.

    “To inherit or have access to the bank account of deceased person, one will have to be named in the deceased person’s will as a beneficiary of the account,” Mr. Donkor clarified.

    He explained that a named beneficiary would need to undergo a legal process in which a court of competent jurisdiction grants probate. This probate would give the beneficiary the legal authority to access the deceased person’s account.

    In cases where the account holder dies without a will, those with an interest in the estate must apply to be appointed as administrators. This requires the issuance of Letters of Administration by a court of competent jurisdiction, which would then allow them access to the deceased person’s account, the BoG official added.

    “In Ghana, this concept of next-of-kin is not defined in our laws, so our discussion is based on what traditionally has been the practice, and that is what is likely to continue until such time that as a country we include this in a particular law,” he said.

  • Transactions conducted through mobile money services surpasses GHS1.9tr – BoG

    Transactions conducted through mobile money services surpasses GHS1.9tr – BoG

    The Bank of Ghana’s (BoG) 2023 FinTech Sector Report indicates substantial advancements in the nation’s digital financial sector, with mobile money accounts exceeding 65 million and total transaction values surpassing GH¢1.9 trillion.

    This development represents a significant achievement in Ghana’s pursuit of a more inclusive and cashless economy.

    The surge in this sector is fueled by the growing acceptance of mobile financial services, which offer a dependable and efficient way for millions of Ghanaians, particularly in underserved and rural regions, to obtain financial services.

    According to the report, mobile money has established itself as a prominent player in Ghana’s financial framework, with transaction volumes growing exponentially each year.

    The Bank of Ghana emphasizes the vital contribution of Rural and Community Banks (RCBs) to the national financial inclusion strategy.

    The central bank has pointed out that RCBs, which act as crucial financial service providers for rural communities, have a unique chance to utilize technology and digitalization in their operations.

    By implementing digital solutions, RCBs could effectively narrow the financial access divide in rural areas, delivering more customized services tailored to the needs of local populations.

    At the 23rd Annual Chief Executive Officers’ Conference held in Ho, Mrs. Elsie Addo Awadzi, the BoG’s Second Deputy Governor, stressed the significance of digital transformation for the rural banking sector through remarks made by Mr. Yaw Sapong, Director of the Other Financial Institutions Supervision Department.

    She emphasized that RCBs should capitalize on technology to broaden their reach and enhance the quality of their service offerings.

    Mrs. Awadzi highlighted the BoG’s dedication to promoting financial inclusion through digital initiatives, referencing the success of the Ghanapay initiative, which serves as a national digital payments platform aimed at improving financial service access, particularly in rural regions.

    She encouraged RCBs to adopt this platform and build collaborations with FinTech companies via the ARB Apex Bank to foster innovation and tailor their offerings to customer needs.

    Furthermore, she emphasized the necessity for RCBs to move beyond standard financial products, asserting that to effectively assist rural communities, they must create specialized financial solutions that address the specific requirements of local populations.

    This entails comprehending the financial rhythms of farmers, small-scale traders—particularly women and individuals with disabilities—and local enterprises.

    By providing services such as savings and loan products that align with agricultural and business cycles, RCBs could ensure that their offerings remain relevant and accessible to their intended clients, she stated.

    She noted that this strategy would not only bolster the financial well-being of rural communities but also position RCBs as the primary source for financial services in those areas.

    To maintain this progress, Mrs. Awadzi urged RCBs to invest in capacity building and effective corporate governance practices, suggesting that enhancing staff skills would enable RCBs to adapt to changing financial needs, while robust governance structures would promote accountability and long-term stability.

    Mr. Alex Kwesi Awuah, Managing Director of ARB Apex Bank, also praised the successful rollout of the Financial Sector Development Project (FSDP).

    With support from the Government of Ghana and the World Bank, the FSDP has played a crucial role in implementing digital banking platforms for RCBs, facilitating seamless and secure digital financial services for their clients.

    Mr. Awuah pointed out that the digital transformation of RCBs has not only enhanced their operational effectiveness but also allowed them to broaden their customer base, integrating more Ghanaians into the formal financial system.

    The 23rd Annual CEOs Conference convened 147 CEOs from RCBs nationwide, offering a forum for rural banking leaders to explore challenges, opportunities, and the future of the sector.

    Held on the theme: “Positioning Rural Banking at the Centre of the National Financial Inclusion Agenda,” the event also featured representatives from the Bank of Ghana, executives from the Association of Rural Banks, and the Board Chairman of ARB Apex Bank, Dr Toni Aubyn.

    As the rural banking sector continues to play a pivotal role in Ghana’s financial landscape, the adoption of technology and a customer-centric approach will be essential in ensuring sustainable growth and widespread financial inclusion across the country.

  • BoG’s eCedi wins prestigious award in London

    BoG’s eCedi wins prestigious award in London

    The Bank of Ghana (BoG) has been awarded the Innovation in Digital Currency Design for Financial Inclusion during the 2024 Payment, Innovation, and Technology Week, which took place in London, UK, from September 23 to 26.

    The event was organized by Currency Research.

    This recognition was based on the Bank’s effective design of the eCedi, featuring strong governance, accessible (both online and offline) functionality, interoperability, and infrastructure aimed at advancing financial inclusion.

    The Bank’s approach to ecosystem engagement was also a key factor in earning this award. This approach included:

    1. Involvement of banks and payment service providers in the eCedi pilot.
    2. Organizing the eCedi Hackathon, which encouraged the public to present innovative ideas.
    3. Conducting a live trial of the eCedi at the 3iAfrica Summit, allowing participants to make payments at the Digital Village for goods and services.
  • Kwahumanhene directed to step aside as ADB Board chair over GHC2m fraud

    Kwahumanhene directed to step aside as ADB Board chair over GHC2m fraud

    The Bank of Ghana (BoG) has directed Daasebre Akuamoah Agyapong II, the Kwahumanhene, to step aside from his position as the Board Chairman of the Agricultural Development Bank (ADB) following allegations of misconduct involving a GH¢2 million transaction.

    In an October 10 letter, the BoG indicated that Daasebre Akuamoah Agyapong II’s “continued holding of office as a Director of the ADB has become untenable due to the irreparable damage these events have caused to the image of the bank.”

    The directive was issued in accordance with Section 103 (2)(d) of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (ACT 930), and ordered him to “immediately resign from your position as a director of the ADB and appropriately handover.”

    The allegations first surfaced when a whistleblower, Collins Darkwah Aboagye, filed a formal petition to the Office of the President.

    In the petition, Mr. Aboagye detailed accusations of misconduct related to the GH¢2 million transaction, which reportedly involved potential conflicts of interest, financial mismanagement, and actions that compromised the fiduciary responsibilities of Daasebre Akuamoah Agyapong II in his role as Board Chairperson of ADB.

    Agricultural Development Bank PLC (ADB) is a universal bank offering a full range of banking products and services in Consumer, Corporate, Parastatals/Public Sector, SME, Agribusiness, Trade and E-Banking services. Its business focus is universal banking with a developmental focus on Agriculture and more.

    The Bank successfully listed on  the Ghana Stock Exchange (GSE) on December 20, 2016. The new ownership structure of the Bank is:

    1. Financial Investment Trust -64.05%
    2. Government of Ghana – 21.50%
    3. Ghana Amalgamated Trust PLC- 11.26%
    4. Retail investors and ADB staff – 3.2%.
  • BoG’s rate cut unlikely to lower T-bill yields – Report

    BoG’s rate cut unlikely to lower T-bill yields – Report

    The Treasury bill (T-bill) market is anticipated to maintain high yields, even after the Bank of Ghana (BoG) implemented a notable cut in its policy rate.

    Recently, the central bank reduced its Monetary Policy Committee benchmark rate from 29 percent to 27 percent.
    However, the impact of this reduction on T-bill yields seems limited due to the government’s significant domestic financing needs.

    Another factor contributing to the persistently high yields is tight market liquidity. Analysts suggest that the strong demand for domestic financing amid rising price pressures, combined with investors’ absorption of the central bank’s policy change, is likely to sustain elevated yields in the near term.

    In its latest market review, Databank commented, “Despite the sharp cut in benchmark rate, we believe that heavy domestic financing needs will keep yields elevated in the coming week”.

    Databank also noted that any potential adjustment in the BoG’s 56-day bill yield could lead to a decrease in T-bill yields, although this has yet to occur.

    The ongoing increase in T-bill yields highlights the broader challenges the government faces in meeting its weekly auction targets.

    Recent auctions have seen a continuous upward trend in yields across various tenors. The 91-day T-bill rose by 63 basis points (bps) to 25.20%, reaching its highest level since October 2023.

    Additionally, the 182-day and 364-day bills increased to 26.85 percent and 28.35 percent, reflecting rises of 11 bps and 60 bps, respectively, from the previous week.

    This current rate environment marks a significant change from the first half of 2024, when T-bill yields were declining.

    At the end of June 2024, the 91-day bill was at 24.87 percent, while the 182-day and 364-day bills were at 26.80 percent and 27.79 percent, respectively. This reversal signifies rising borrowing costs for the government, which is under pressure to secure adequate funding in the domestic market.

    According to Apakan Securities, last week’s T-bill auction experienced the steepest undersubscription in five months.

    The auction, conducted on Friday, achieved only 64 percent of the government’s ambitious GH¢7.44 billion target.

    Investors submitted bids totaling GH¢4.47 billion across all tenors, with the Treasury accepting all to meet maturing obligations of GH¢3 billion. This undersubscription was anticipated, given the historically high target set for that week.

    “This is the largest weekly target we’ve seen, and the undersubscription is a clear indication of the financing pressure government is facing,” Apakan Securities stated in its market review.

    The auction’s coverage ratios for targets and maturity were 0.64x and 1.61x, respectively, highlighting a significant shortfall in bids against the government’s financing requirements.

    This week, the Treasury plans to offer GH¢5.98 billion across the 91-day to 364-day range to cover the maturing face value of GH¢3 billion.

    The next T-bill auction is scheduled for Friday, October 4, 2024, and market participants will closely watch whether the government can secure the necessary funds amid ongoing liquidity challenges.

    On the secondary market, trading activity declined last week, with total volumes falling by 17.92 percent week-on-week to GH¢349.73 million.

    New bonds dominated trading, comprising 99.6 percent of the total volume. Notably, the February 2027 bond, with an 8.35 percent coupon rate, was the most actively traded, making up about 66 percent of the total volume. The February 2028 bond, offering an 8.50 percent coupon rate, also attracted significant interest, clearing at 25.16 percent.

    Market observers anticipate continued trading activity following the BoG’s 200 basis points rate cut, which could draw more investor interest toward medium-term papers.

    However, the long-term outlook remains uncertain, with analysts highlighting the government’s ongoing domestic financing needs as a critical factor likely to keep T-bill yields elevated in the short term.

  • BDCs to access BOG’s $120m for FX in Q4 2024

    BDCs to access BOG’s $120m for FX in Q4 2024

    Bank of Ghana (BoG) is set to auction $120 million to Bulk Oil Distribution Companies (BDCs) during the fourth quarter of 2024, matching the amount allocated to them in both the second and third quarters.

    According to the Central Bank’s Forex Forward Auction Calendar, $40 million will be auctioned each month, beginning with $20 million in October 2024.

    This pattern will continue into November 2024, with two auctions scheduled on November 13 and November 27.

    Similarly, two auctions will take place in December, on December 12 and December 27, offering $20 million each time.

    The Central Bank has outlined that the auctions will be conducted between 9:30 am and 10:30 am on the specified dates, with results announced by 3:00 pm.

    The process will adhere to the guidelines available on the Bank of Ghana’s website.

    The purpose of these dollar auctions is to provide BDCs with sufficient foreign exchange to purchase refined petroleum products, helping to maintain stability in the oil import market and improve dollar liquidity in the foreign exchange system.

  • Ghana posts 2.4% fiscal deficit in first 7 months of 2024 – BoG

    Ghana posts 2.4% fiscal deficit in first 7 months of 2024 – BoG

    Provisional data on budget execution from January to July 2024 indicates that Ghana recorded an overall fiscal deficit of 2.4 percent of GDP, surpassing the budget target of 2.8 percent of GDP.

    The deficit, amounting to GH¢24.8 billion, was financed through both domestic and foreign sources, with GH¢24.2 billion sourced domestically and GH¢17.4 billion from international financing.

    The primary balance for the period reflects a deficit of GH¢3.8 billion, equivalent to 0.4 percent of GDP, slightly above the primary deficit target of GH¢3.5 billion (0.3 percent of GDP).

    According to the 2024 National Budget Statement, the aggregate fiscal deficit, including grants, increased to 6.1 percent of GDP in 2022, up from 6.5 percent in 2021. Excluding grants, the deficit rose to 5.8 percent of GDP in 2022 from 5.0 percent in the previous year. This deterioration in the fiscal position occurred amidst rising debt servicing costs due to hikes in domestic and external interest rates, as well as increased transfers and relief supports aimed at cushioning the population against the surging cost of living.

    The overall commitment basis fiscal deficit is projected to moderate from an estimated 4.6 percent of GDP in 2023 to 4.9 percent of GDP in 2024, with a further reduction expected to 2.4 percent of GDP by 2027. Similarly, the overall cash basis fiscal deficit is expected to improve from an estimated 5.3 percent of GDP in 2023 to 6.0 percent of GDP in 2024, and subsequently to 3.3 percent of GDP by 2027.

    In terms of external payments, Ghana’s position remained strong in the first eight months of the year. The trade balance recorded a provisional surplus of US$2.78 billion, a significant increase from the surplus of US$1.66 billion recorded during the same period in 2023. This surplus was primarily driven by increases in gold and crude oil exports, which surged by 22.3 percent to US$12.92 billion in total exports. Notably, gold exports rose by 62.2 percent to US$7.27 billion, while crude oil exports increased by 16.7 percent to US$2.77 billion.

    In contrast, cocoa exports, including both beans and products, fell by 42.7 percent to US$917.8 million as of August 2024, largely due to challenges posed by extreme weather conditions. The total imports bill also increased by 14.0 percent to US$10.14 billion during the same period. Oil imports accounted for US$3.0 billion, an increase of 3.6 percent, while non-oil imports rose by 19.0 percent to US$7.1 billion.

    The buildup of international reserves continued into August 2024, with gross international reserves increasing by US$1.58 billion to reach US$7.50 billion at the end of the month, providing 3.4 months of import cover. Net international reserves also saw a boost, increasing by US$1.73 billion to US$4.92 billion at the end of August 2024. This higher accumulation in gross international reserves was primarily attributed to the strong performance of the domestic gold purchase program.

    Ghana’s fiscal and external performance indicates a mixed yet improving outlook as the nation navigates economic challenges while striving for sustainability and growth.

    MPC-Press-Release-September-2024Download
  • BoG receives share acquisition list from Société Générale

    BoG receives share acquisition list from Société Générale

    Société Générale has officially provided the Bank of Ghana (BoG) with the full list of individuals and entities interested in acquiring shares in the bank, as part of the ongoing strategic review of its operations in Ghana.

    This submission fulfills a key regulatory requirement as Société Générale reviews its ownership structure in Ghana in line with BoG’s expectations.

    In May, Société Générale Ghana announced that it had begun a strategic review of its operations in the country, following reports that the French bank was considering exiting Ghana after almost two decades of operation. The bank also revealed that it had engaged investment bank Lazard to explore potential buyers for its businesses in Ghana, Cameroon, and Tunisia.

    In response, the Bank of Ghana requested a comprehensive list of bidders to ensure transparency and avoid any unexpected outcomes during the sale process.

    BoG Governor Dr. Ernest Addison, in a recent Monetary Policy Committee (MPC) press briefing in Accra, confirmed that the Central Bank has now received the full list of potential buyers.

    “As an update, we have been furnished with all the bidders of shares that are being disposed of. So the bidding process is still ongoing and hopefully, when they decide on the preferred bidder, they will also let us know,” Dr. Addison stated.

    Currently, Société Générale holds a 56% stake in its Ghanaian operations, with the Social Security and National Insurance Trust (SSNIT) owning 19%. An individual owns about 7%, while the remaining shares are held by other entities. The identities of the bidders remain of great interest as the process unfolds.

    While the Bank of Ghana evaluates the prospective shareholders, Société Générale has assured its customers that it will pursue strong partnerships and investments to enhance its long-term performance and profitability.

  • This is how much you need to be able to invest in Ghana’s Gold Coin – BoG reveals

    This is how much you need to be able to invest in Ghana’s Gold Coin – BoG reveals

    Financial Markets Advisor to the Governor of the Bank of Ghana, Dr. Stephen Opata, has advised potential investors in Ghana’s Gold Coins to prepare a minimum investment of ₵10,000.

    He mentioned that the coins, which will be accessible to the public via commercial banks, are expected to be priced starting at approximately ₵10,000.

    “So initially, obviously, if you want to buy the quarter-ounce coin, you must have savings of ₵10,000 minimum; you must have that. So if you don’t have that, then you would not be able to do that (invest),” he stated during an appearance on Metro TV’s Bottomline program on Monday, September 30, 2024.

    The Bank of Ghana (BoG) recently unveiled the Ghana Gold Coin, aimed at offering Ghanaians more diverse investment opportunities.

    These coins, which will come in various sizes, are part of the central bank’s Responsible Gold Sourcing Policy Framework.

    Dr. Stephen Opata noted that the BoG’s goal is to promote greater inclusivity by introducing these coins, allowing more people to participate in the investment.

    “Like I said, if we are able to tokenise this, that’s the next stage that will become very interesting, then we will have more inclusion. So the next stage is going to be interesting.

    We want to go into this project in phases, and as we gauge the success and roll this out, we will see that more people will be included. We will even get to the point where Ghanaians should be able to buy this using their mobile money account,” he stated.

    Dr. Ernest Addison, Governor of the Bank of Ghana, announced that the newly introduced ‘Ghana Gold Coin’ is made from refined dory gold, achieving a purity level of 99.99%.

    Backed by the central bank, the coins have been officially issued and guaranteed.

    During a press briefing last week, Dr. Addison highlighted that the gold coins aim to relieve pressure on the cedi by offering an alternative investment option for those who typically buy and hoard foreign currency like the dollar.

  • Drop in inflation rates has improved business, consumer confidence – BoG

    Drop in inflation rates has improved business, consumer confidence – BoG

    The economy is beginning to recover, with both consumer and business confidence increasing, according to recent surveys by the Bank of Ghana (BoG).

    The August 2024 reports indicate significant improvement in overall sentiment, driven by lower inflation, robust GDP growth, and companies meeting their short-term targets.

    This boost in confidence is mainly due to continuous improvements in the macroeconomic landscape.

    Speaking at a press briefing after the 120th Monetary Policy Committee (MPC) meeting, Dr. Ernest Addison, Governor of the Bank of Ghana, emphasized the key drivers behind this positive outlook.

    “Consumer confidence improved on account of easing inflationary pressures, which has led to optimism about future economic conditions,” Dr. Addison noted.

    He further noted that business confidence has risen as companies achieved their short-term goals and expressed optimism about their future prospects, driven by improving economic conditions.

    This surge in confidence aligns with stronger-than-expected economic growth. Provisional data from the Ghana Statistical Service for Q2 2024 showed real GDP growth at 6.9%, a significant jump from 2.5% in the same period of 2023.

    Non-oil GDP growth was particularly notable, reaching 7%, compared to 3.1% a year ago.

    Leading the recovery was the industry sector, which grew by 9.3%, rebounding from a 2.6% contraction last year. The services and agriculture sectors also showed strong growth, recording 5.8% and 5.4% respectively.

    This economic recovery is further supported by key indicators suggesting sustained improvement in activity. The real Composite Index of Economic Activity (CIEA), a central bank tool for tracking short-term economic trends, grew by 1.6% in July 2024, a sharp reversal from the 2.8% contraction seen in the same period in 2023. Key drivers of this positive trend included increased construction, rising household consumption, and a boost in both exports and imports.

    Dr. Addison stressed that improvements in the macroeconomic environment were closely linked to the ongoing disinflation process, which remains on track.

    Headline inflation dropped steadily, reaching 20.4% in August, down from 22.8% in June 2024. Food inflation, in particular, fell to 19.1% in August from 24% in June, while non-food inflation also decreased slightly to 21.5%.

    “The disinflation process remains on track, supported by a tight monetary policy stance and easing food inflation,” Dr. Addison said.

    He also highlighted that the Bank’s core inflation measure, which excludes volatile items like energy and utilities, eased to 19.4% in August from 22.1% in June.

    This renewed consumer and business confidence is expected to fuel further economic activity. The Purchasing Managers’ Index (PMI), which tracks the performance of manufacturing and services, reflected this upward trend, rising to 51.1 in August from 50.1 in July.

    A PMI reading above 50 indicates expansion in business activity, reinforcing the belief that the economy is on a sustainable recovery path.

    The central bank projects continued economic growth, with inflation expected to ease towards its target range of 13-17% by the end of the year.

  • Interest rates drop as BoG lowers Monetary Policy Rate to 27%

    Interest rates drop as BoG lowers Monetary Policy Rate to 27%

    The Bank of Ghana (BoG) has reduced its Monetary Policy Rate by 200 basis points, lowering it to 27%.

    This is the second cut since 2021, aimed at reducing inflation and providing relief to borrowers.

    Following a nine-month hold at 29%, which was previously reduced from 30% in January, the latest cut is expected to offer temporary relief to borrowers in the coming months.

    During the 120th Monetary Policy Committee briefing on Friday, September 27, BoG Governor Dr. Ernest Addison explained that the decision reflects recent inflationary declines and positive economic developments.

    “In the assessment of the Committee, preliminary data since the last MPC meeting held in July 2024 indicates that macroeconomic conditions have generally improved. Headline inflation has eased, and growth has picked up.

    “Fiscal policy implementation has been robust, providing impulse that is supportive of growth, while monetary conditions have remained tight and supportive of the disinflation process.”

    “Headline inflation, since the first quarter, has declined for five consecutive months by 5.4 percentage points. Core inflation has also declined sharply over the same comparative period by 6.9 percentage points. These trends suggest that the disinflation process is on course.”

    “The latest forecasts show that inflation will continue to ease towards the range target of 13-17 per cent for the year and steadily track back towards the medium-term target of 6-10 per cent by the end of 2025, barring unanticipated shocks. At the current juncture, the committee judged the risks to the inflation outlook as fairly balanced.”

    “Given these considerations, the Committee decided to lower the Monetary Policy Rate by 200 basis points to 27.0 per cent.”

  • Ghana Gold Coin to mop up extra liquidity from the banking sector – BoG

    Ghana Gold Coin to mop up extra liquidity from the banking sector – BoG

    The Bank of Ghana (BoG) has introduced the Ghana Gold Coin as part of a strategic initiative aimed at absorbing excess liquidity from the banking sector.

    This move, under the BoG’s domestic gold programme, is expected to provide Ghanaians with a new investment opportunity while stabilizing the local currency and reducing reliance on the U.S. dollar.

    Speaking at the Monetary Policy Committee (MPC) meeting on Friday, September 27, Dr. Ernest Addison, Governor of the Bank of Ghana, announced that the Ghana Gold Coin will be available in three denominations: a one-ounce coin, a half-ounce coin, and a quarter-ounce coin. These coins will be sold in commercial banks within the next two weeks, with prices to be published on the BoG’s website.

    “The Ghana Gold Coin is manufactured from dowry gold dug out of Ghana, refined to 99.99 per cent purity, and is issued and guaranteed by the BoG,” Dr. Addison said.

    He added that the design features the Ghana coat of arms on the front and the Independence Arch on the back. “The coin will be packaged in a wooden story box, with a transparent coin holder and a certificate of ownership,” he noted.

    Dr. Addison explained that this initiative aligns with the central bank’s efforts to manage liquidity and promote gold as a secure investment for residents. “The Ghana Gold enables the BoG to mop up extra liquidity from the banking sector and will supplement the use of our BoG bills. It offers an additional investment option for savers residing in Ghana to benefit from the BoG domestic gold purchase programme,” he remarked.

    This introduction of the Ghana Gold Coin forms part of the BoG’s broader strategy to strengthen the economy and reduce the hoarding of foreign currencies, particularly the U.S. dollar.

    The next MPC meeting is scheduled for November 20-22, 2024, with the policy decision to be announced on Monday, November 25, 2024.

  • Gold coin introduction, not a solution to cedi depreciation – Prof Bokpin to BoG

    Gold coin introduction, not a solution to cedi depreciation – Prof Bokpin to BoG

    Economist Professor Godfred Bokpin has expressed scepticism about the Ghana Gold Coin as a remedy for the cedi’s depreciation.

    On Friday, the Bank of Ghana (BoG) introduced the Ghana Gold Coin, a new investment product aimed at curbing dollar hoarding. The initiative is part of the domestic gold programme, designed to soak up excess cash in circulation and bolster the cedi’s strength against major currencies.

    The coin will come in three versions: one-ounce, half-ounce, and quarter-ounce, and will be sold through commercial banks within two weeks. BoG Governor Dr. Ernest Addison, speaking at the Monetary Policy Committee meeting on September 27, noted that coin prices will be made available on the central bank’s website.

    While the initiative is expected to reduce market liquidity and stabilize the cedi, Professor Bokpin argues that it falls short of offering a long-term solution to the currency’s persistent decline.

    But Prof Bokpin in an interview on Eyewitness News on Citi FM on Friday, indicated that “I associate with the intervention from the central bank to the extent that there are very limited alternative avenues right now in the market and therefore any genuine attempt to offer alternatives would be welcomed, and the next important question as you rightly asked is whether this is the solution.

    “We have been waiting for this all this while, and I think it is not too hard to look for that and to conclude that that is not the solution.”

    “The reason is as much as we acknowledge that this is an alternative, the market is dry largely also because of confidence and all of that. This is not the solution.”

    Prof Bokpin stressed that the introduction of the coin was not a substitute for managing the economy well.

    “I want to believe that it is not packaged as a substitute for managing the economy well because the fundamental thriving factors pushing the cedi to lose its own against the major trading currencies when it comes to fiscal discipline when it comes to enhancing the capacity of the local economy, less import reliance, adding value to the export of your raw commodities, this doesn’t substitute for all of that,” he added.

  • Policy rate reduced from 29% to 27% – BoG

    Policy rate reduced from 29% to 27% – BoG

    The Bank of Ghana has lowered the monetary policy rate by 200 basis points, reducing it from 29 percent to 27 percent.

    Dr. Ernest Addison, who serves as the Chairman of the MPC and Governor of the BoG, explained that this decision is linked to the cedi’s relative stability, a downward trend in inflation moving towards a more balanced state, effective implementation of fiscal policies, and overall improved macroeconomic conditions.

    Additionally, he pointed out a notable enhancement in the reserves held by the Central Bank of Ghana.

    This announcement was made by Dr. Addison during a press conference on Friday, September 27, 2024, which coincided with the 120th meeting of the Monetary Policy Committee.

  • Cedi depreciates by 24.3% against dollar in nine months – BoG

    Cedi depreciates by 24.3% against dollar in nine months – BoG

    The Ghana cedi has depreciated by 24.3% against the US dollar on the interbank forex market as of September 2024, according to the Bank of Ghana’s latest Summary of Economic and Financial Data. This marks a slower depreciation compared to the 22.9% decline recorded during the same period last year.

    The data indicates that the cedi lost 7.7% of its value to the dollar in March 2024, increasing to 18.6% depreciation by June 2024. On the retail market, the cedi is currently trading at an average of GH¢16.45 per dollar, while the Bank of Ghana quotes one dollar at GH¢15.70.

    Against other major currencies, the cedi has also experienced significant losses. It has depreciated by 27.7% against the British pound, now trading at GH¢20.93. The cedi has also lost 25.0% of its value against the euro, with the current rate at GH¢17.49.

    Slower Depreciation of the Cedi

    Despite these figures, the cedi’s depreciation has slowed in recent weeks. Demand pressures for foreign currencies appear to be easing, leading to a less rapid decline in the value of the cedi.

    Last week, the local currency depreciated by 1.21% against the dollar, a slower rate compared to the previous week’s 1.84%. Similarly, it weakened by 0.71% against the pound, down from 1.43% the previous week. However, the cedi recovered its 0.42% weekly loss against the euro on the retail market.

    Since the beginning of the year, the cedi has lost about 25.61% of its value against the US dollar, reflecting the persistent challenges facing the local currency.

  • 8 additional data providers, users of credit reporting system gain approval from BoG

    8 additional data providers, users of credit reporting system gain approval from BoG

    In 2023, the Bank of Ghana reported receiving 13 applications from non-banking companies seeking recognition as data providers and authorized users of the Credit Reporting System (CRS).

    Of these applications, eight were approved by the central bank. According to the BoG’s annual report on credit activities, these approvals enable the respective companies to contribute data to credit bureaus and access credit information from them.

    As of December 2023, a total of 33 companies had been officially designated as part of the system. The report explained that the approvals were granted based on the companies’ involvement in trade credit or the processing of data essential to enhancing the credit reporting framework.

    The approved institutions included retailers, fintech companies, and credit unions.

    The Bank of Ghana also initiated discussions with the Microfinance and Small-Scale Loans Centre (MASLOC) and the Ghana Enterprise Agency to develop procedures for their participation in the CRS.

    Additionally, the central bank began talks with the Electricity Company of Ghana (ECG) to further expand the system by incorporating relevant data for a more comprehensive CRS.

    “The engagement, when completed, will allow ECG to submit credit information to credit bureaux to improve the credit reports of consumers and businesses.”

  • BoG intensifies effort to combat financial fraud

    BoG intensifies effort to combat financial fraud

    The Bank of Ghana (BoG) has intensified monitoring mechanisms within the financial sector to curb the rising number of fraud cases.

    This follows the release of its latest annual Fraud Report, which revealed that the number of staff involved in fraudulent activities in banks and Specialized Deposit-Taking Institutions (SDIs) jumped from 188 in 2022 to 274 in 2023, reflecting a 46 percent increase.

    Additionally, the financial losses due to fraud climbed by 7 percent, reaching 88 million cedis over the same period.

    In an interview with Joy Business, the Deputy Director of the Financial Stability Department at the BoG, Dr. John Dadzie, mentioned that strategies have been set in place to require banks to provide a detailed plan to address the issue.

    “The Bank of Ghana is concerned about fraud prevention across all banks. We do not differentiate between institutions with higher or lower fraud rates. Upon releasing our reports, we write to all banks to submit strategies outlining their plans to minimize fraud incidence and related losses”, he said.

    Dr. Dadzie stated that the aim of the BoG is reduce fraud in the financial sector to the lowest level to discourage staff and the public from being enticed to engage in fraudulent acts.

    He added that it is the wish of the bank to stop from fraudulent activities from occurring in the first place.

    “Fraud is fraud and from the regulators point of view, we are looking at not having fraud situations at all. Even if a bank has one or two incidences of fraud, the impact could be very significant”, he pointed out.

    Declining to mention specific names of banks involved, Dr. Dadzie said the mandate of the central bank is to put in measures that will prescribe punitive actions for anybody involved in fraud in the financial sector.

    “The Bank of Ghana is very much concerned not just in terms of who has more or less. Fraudulent activities are unacceptable, and from a regulator point of view, we aim to eliminate such occurrences entirely. Even isolated incidents of fraud can have significant consequences for banks”.

  • Non-performing loans ratio in banking sector increased to 24.2% in 2023 – BoG

    Non-performing loans ratio in banking sector increased to 24.2% in 2023 – BoG

    The Bank of Ghana’s July 2024 Monetary Policy Report has disclosed that the Non-Performing Loans (NPL) ratio in the banking sector increased to 24.2% in June 2024, compared to 18.7% in June 2023.

    Even when adjusted for fully provisioned loan losses, the NPL ratio climbed to 10.8% in June 2024, up from 7.8% the previous year, indicating a rise in all categories of non-performing loans.

    This increase in the NPL ratio is attributed to the faster growth of non-performing loans compared to total loans during the review period.

    The industry’s total NPL stock surged by 49.4%, reaching GH¢20.4 billion in June 2024, up from GH¢13.7 billion, showing a deterioration in both domestic and foreign currency-denominated loans.

    The private sector, being the largest recipient of bank credit, accounted for the majority of non-performing loans.

    Its share of NPLs increased slightly to 95.6% in June 2024, from 95.5% in June 2023. Meanwhile, the public sector’s share dropped marginally to 4.4% from 4.5% in the same period.

    Among the sectors, agriculture, forestry, and fishing reported the highest NPL ratio at 56.4%, up from 30.0% a year prior, followed by the transportation, storage, and communication sector, with an NPL ratio of 49.1%, up from 22.1%.

    The construction sector’s NPL ratio rose to 36.8% from 32.8%, while the electricity, water, and gas sector saw an increase to 20.6% from 7.8%. The commerce and finance sector remained steady at 20.2%.

    Mining and quarrying recorded the lowest NPL ratio at 13.7% in June 2024, slightly higher than the 12.7% recorded in June 2023.

  • Banking sector’s financial health has strengthened – BoG

    Banking sector’s financial health has strengthened – BoG

    The July 2024 Bank of Ghana monetary policy report reveals a strong and profitable banking sector with improved capital buffers.

    Key indicators show a healthy liquidity position with core liquid assets rising to 47.1% of total deposits and 35.8% of total assets by June 2024, up from previous years.

    The Capital Adequacy Ratio (CAR) remains robust at 14.3%, meeting regulatory standards.

    Profitability indicators show a continued positive trend, though growth rates in profits moderated compared to last year. Net interest income grew by 19.4%, while total income increased to GH¢23.0 billion.

    The sector’s operational efficiency improved, with a decrease in the cost-to-income ratio and better management of operating expenses.

    The report also highlights a significant rise in offshore balances and a shift in borrowing patterns, with increased domestic borrowings and a decline in long-term external borrowings.

    The Credit Conditions Survey indicates an easing in loan conditions for enterprises and households, with expectations of continued easing in the near future.

    Overall, the banking sector shows signs of recovery and stability, though concerns over asset quality persist. The outlook remains positive, with ongoing recapitalisation and strict credit standards essential for maintaining good performance.

  • SSNIT contribution by private sector surges by 2.4% – BoG Report

    SSNIT contribution by private sector surges by 2.4% – BoG Report

    The Bank of Ghana’s Monetary Policy Report for July has revealed an increase in private sector contributions to the Social Security and National Insurance Trust (SSNIT) Pension Scheme (Tier-1).

    The report highlights a 2.4% rise in SSNIT contributions for the first half of 2024, reflecting steady growth in labor market activities within the manufacturing sub-sector.

    In May 2024, total private sector workers’ contributions surged by 39.6% year-on-year to GH¢470.92 million, compared to GH¢337.23 million during the same period in 2023. Cumulatively, for the first five months of 2024, contributions grew by 28.8%, amounting to GH¢1.97 billion, up from GH¢1.53 billion recorded in the corresponding period of 2023.

    The total number of private sector SSNIT contributors, which is used as a gauge of employment conditions, also saw a 2.7% increase to 1,007,341 in May 2024, compared to 980,808 during the same period in the previous year. For the first five months of 2024, the total number of contributors rose by 4.8% to 5,063,676, from 4,829,487 recorded in 2023.

    Employment growth which may have resulted from the progress recorded in the manufacturing sub-sector is said to have spurred the surge in contributions.

    The Bank of Ghana’s report also indicates an improvement in direct tax collection, with total direct taxes increasing by 43.7% year-on-year in May 2024 to GH¢4.11 billion, compared to GH¢2.86 billion in May 2023. The cumulative total direct taxes collected for the first five months of 2024 amounted to GH¢22.19 billion, up 31.6% from GH¢16.86 billion during the same period last year.

    Income tax, comprising PAYE and self-employed contributions, accounted for 48.8% of the total direct tax collected, while corporate tax contributed 38.4%, and other tax sources added 12.8%.

    In terms of labor demand, the number of jobs advertised in selected print and online media remained stable, with a total of 2,968 job adverts in June 2024, slightly down from 2,993 in June 2023. Cumulatively, job adverts for the first half of 2024 increased by 2.4% to 17,278, compared to 16,866 during the same period in 2023.

    These trends, as outlined in the Bank of Ghana’s report, reflect positive developments in the country’s labor market and overall economic performance.