The Ghanaian government recorded significant growth in direct tax collections for the first five months of 2024, raking in a total of GH¢22.19 billion, according to the Central Bank’s July 2024 Monetary Policy Report.
This marks a 31.6 percent increase compared to the GH¢16.86 billion collected during the same period in 2023.
A direct tax is a type of tax that is paid directly to the government by the individual or organization on whom it is imposed.
The report further detailed that activities within the manufacturing sub-sector, as indicated by trends in direct tax collection and private sector workers’ contributions to the Social Security and National Insurance Trust (SSNIT) Pension Scheme (Tier-1), also improved as of May 2024.
“Total direct taxes increased by 43.7 percent (year-on-year) to GH¢4.11 billion in May 2024, relative to GH¢2.86 billion recorded in May 2023,” the report highlighted.
This notable growth in tax revenue was driven by various sub-tax categories, with income tax (PAYE and self-employed) accounting for the largest share at 48.8 percent. Corporate tax contributed 38.4 percent, while “other tax sources” made up the remaining 12.8 percent.
Additionally, private sector contributions to the SSNIT Pension Scheme (Tier-1) surged by 39.6 percent year-on-year, reaching GH¢470.92 million in May 2024, up from GH¢337.23 million during the same month in 2023.
For the first five months of 2024, cumulative contributions grew by 28.8 percent, totaling GH¢1.97 billion, compared to GH¢1.53 billion recorded in the corresponding period of 2023.
The Bank of Ghana’s latest Monetary Policy Report reveals that the banking sector’s total assets surged to GH¢323.2 billion by June 2024, marking a 33.3 percent increase from the previous year. This growth is a substantial rise compared to the 21.2 percent increase recorded in June 2023.
The report attributes this significant expansion in assets to a robust growth in deposits and the depreciation of the Ghana cedi.
“Foreign assets grew by 57.6 percent in June 2024, compared to 74.5 percent in June 2023, while domestic assets grew by 31.0 percent in June 2024, up from 17.8 percent growth same period last year”, it said.
The report indicates that the proportion of foreign assets within the total assets rose to 10.2 percent, up from 8.6 percent, while the share of domestic assets fell to 89.8 percent from 91.4 percent in June 2023.
“Investments grew by 19.2 percent to GH¢107.2 billion in June 2024, up from a growth of 11.0 percent in June 2023, due to a significant growth in both short-term and long-term instruments”.
It pointed out that the growth in investments reflected a 7.3 percent growth in short-term bills, from a growth of 149.6 percent in June 2023, while long-term investments (securities) also grew by 28.6 percent in June 2024, having contracted by 23.2 percent in June 2023.
The mixed growth in both bills and securities investments culminated in a reduced share of investments in total assets to 33.2 percent in June 2024, from 37.1 percent in June 2023. Gross loans and advances rose by 15.6 percent to GH¢84.5 billion in June 2024, relative to a 15.4 percent growth in June 2023. Growth in net loans and advances (gross loans adjusted for provisions and interest in suspense) also moderated to 10.3 percent, from 11.3 percent during the same period last year.
The report stated that the higher growth in assets was funded by increases in deposits and other funding sources. Deposits remained the main source of funding for the banking sector, accounting for 76.1 percent share of total assets in June 2024, from 77.4 percent in June 2023.
Deposits improved by 31.1 percent to GH¢245.9 billion in June 2024, as against 42.8 percent growth recorded in June 2023.
“The foreign currency component of deposits grew by 29.8 percent to GH¢81.2 billion in June 2024, relative to a growth of 62.5 percent in June 2023, suggesting some currency depreciation effect on the overall growth in total deposits”.
According to report, borrowings also picked up by 44.4 percent to GH¢23.2 billion in June 2024, up from 39.1 percent contraction recorded in June 2023.
“The growth in borrowings reflected an uptick in both short-term foreign and domestic borrowings while long-term domestic and foreign borrowings contracted”.
“Short-term domestic borrowings of GH¢15.2 billion at end-June 2024 suggested a growth of 83.0 percent, relative to a contraction of 33.6 percent recorded in June 2023”, it added.
Long-term domestic borrowing, however, contracted by 17.6 percent in June 2024, down from a growth of 45.1 percent during the same period in 2023. Short-term foreign borrowings grew by 33.2 percent, after contracting by 75.7 percent in June 2023, while long-term foreign borrowings contracted by 2.5 percent, from the 16.2 percent contraction registered in June 2023.
Ghana’s Gross International Reserves (GIR) has recorded a significant increase, surging by US$670 million by the end of June 2024.
According to the Central Bank of Ghana’s Monetary Policy Report for July 2024, the country’s gross reserves now stand at US$6.87 billion, equivalent to 3.1 months of import cover. This represents an improvement from the December 2023 figure of US$5.92 billion.
The report also indicated that GIR, excluding encumbered and petroleum assets, rose to US$4.52 billion at the end of June 2024. This compares favourably to the US$3.68 billion recorded in December 2023.
In May 2024, Ghana’s Finance Minister, Dr Mohammed Amin Adam, confirmed earlier signs of improvement, announcing that the country’s Gross International Reserves had reached US$6.2 billion, covering 2.7 months of import cover by the end of February 2024.
Dr Amin noted, “This marks an improvement from $5.9 billion recorded in the corresponding period of 2022.”
The Finance Minister further projected that the reserves would continue to grow, aiming to reach a level that would provide 4.4 months of import cover in the medium term.
The anticipated growth, according to Dr. Amin, is expected to be driven by “external inflows from institutions such as the IMF, World Bank, and other development partners.”
Dr. Amin also highlighted key initiatives contributing to this upward trend, including the government’s Oil for Gold programme, the Bank of Ghana’s Gold for Reserve programme, and the Cocoa syndicated funds.
Despite ongoing pressures on the exchange rate, the Minister underscored that the cedi has shown stability, stating that depreciation against the US dollar had reduced from 54% in November 2022 to 27.8% by the end of December 2023.
The Bank of Ghana (BoG) has reaffirmed its commitment to cracking down on unauthorized lending apps that employ unethical practices to recover debts, including the illegal publication of defaulters’ personal information.
Addressing participants at the MTN Ghana Mobile Money @15 Fintech Stakeholders’ Forum, Kwame Oppong, the Director of Fintech at the BoG, underscored the central bank’s zero-tolerance policy towards activities that destabilize the financial sector.
He made it clear that the Bank of Ghana is determined to root out these illegal operations, which have been associated with extreme consequences, including suicides by those unable to repay loans.
“It is a crime to threaten loan defaulters with the publication of their pictures and confidential data,” Mr Oppong stated firmly.
He warned that no product or service should be introduced into the Ghanaian financial space if it poses a threat to the sector’s stability or jeopardizes the livelihoods of individuals and businesses.
In recent months, a troubling trend has emerged where unauthorized lending apps resort to extreme measures, such as publicly shaming borrowers by sharing their images and private information.
Mr Oppong condemned this practice, questioning how such methods could be justified. “How is this a way of making a living—by putting people on suicide watch, threatening to announce to the world that they owe you?” he asked.
To combat these illegal activities, the BoG is collaborating with the Economic and Organised Crime Office (EOCO) and other security agencies to take action against offenders.
“This is why the Bank of Ghana, in partnership with EOCO and security agencies, conducted a raid that led to the arrest of over 200 individuals, including foreigners,” Oppong recalled.
At the same forum, Shaibu Haruna, the Chief Executive of Mobile Money Limited, reiterated MTN’s commitment to enhancing safety measures and increasing education on mobile money fraud. He emphasized that building trust among customers is a top priority as the company continues to develop its services.
The MTN Mobile Money @15 Fintech Stakeholders’ Forum, held under the theme “Building Trust and Cooperation Among Stakeholders: How to Maximize the Impact of Emerging Technologies for the Promotion of Financial Inclusion,” brought together key players in the financial technology sector. The event focused on the impact of new technologies on the financial industry and the importance of strong regulatory frameworks to foster trust among users and stakeholders.
Bank of Ghana has reported that the second quarter of 2024 has recorded 80,873 in collateral registrations in it latest Collateral Registry Quarterly Brief.
This represents a 59.5% annual growth from the 50,695 registrations recorded during the same period in 2023.
In Q2 2024, Savings and Loans Companies topped the registrations with a total of 69,328—a substantial 74.2% rise from the 39,796 recorded in the same period of 2023. Rural and Community Banks (RCBs) also saw an increase, with registrations growing by 28.7%, from 6,019 in Q2 2023 to 7,747 in Q2 2024.
In contrast, banks saw a sharp decline in registrations, dropping by 43.4% from 2,534 in Q2 2023 to 1,433 in Q2 2024. Leasing Companies had the fewest registrations, with only four recorded during the period under review.
The total number of searches conducted at the Collateral Registry in Q2 2024 increased by 10.1% compared to the previous year, reaching 15,617, up from 14,184 in Q2 2023. Savings and Loans Companies were responsible for the majority of searches, accounting for 74.1%, followed by RCBs at 17.6%, and banks at 4.6%.
Microfinance Institutions and Micro Credit Companies conducted the fewest searches, representing 0.8% and 0.1%, respectively. Other lending institutions and the general public made up the remaining 2.7% of searches in the second quarter of 2024.
Member of Parliament for North Tongu, Samuel Okudzeto Ablakwa, has defended his actions in sharing details of a $20 million transfer from the Bank of Ghana (BoG) to the Central Bank of Liberia, insisting that he did not breach national security protocols.
Earlier, Mr. Ablakwa took to social media platform X to reveal that the Ghana Revenue Authority (GRA) had cleared an amount of $20 million intended for the Central Bank of Liberia.
He pointed out discrepancies between documents addressed to the GRA, which indicated that the money was sent to the Bank of Ghana for safekeeping before being transferred to Liberia, and records from Ghana’s central bank, which suggested a different narrative.
The Bank of Ghana responded with a statement, describing the legislator’s actions as “unfortunate” and expressing concerns that his disclosure could compromise sensitive financial information, raising significant security issues. The central bank clarified that the $20 million was transferred to its account as part of an established arrangement with the Central Bank of Liberia.
However, speaking on JoyFM’s Newsnight, Mr. Ablakwa dismissed these concerns, asserting that he had not breached any security protocols. He emphasized that his actions were part of his responsibilities as a legislator, aimed at holding public institutions accountable.
“It is part of our work as Members of Parliament to carry out oversight to let all institutions know that we are on top of our job. We are watching, we are keenly monitoring, and we are carrying out oversight,” Mr. Ablakwa said.
He explained that his intention in posting the issue on social media was simply to seek clarity on the matter, without any ulterior motives. Regarding the issue of posting flight details, which the BoG highlighted as a security concern, Ablakwa clarified that it was an oversight, as the details were included in the documents he shared. He also emphasized that he did not include any flight details in his write-up and that no flight information had been provided regarding the re-exportation of the funds.
“We are carrying out our mandate, it is pure oversight, and I do not see the national security breach in this matter,” he added.
Ablakwa also noted that the $20 million in question was secure and had not been stolen, questioning the basis of the national security concerns raised by the BoG. He highlighted the increasing incidents of money laundering as a justification for his scrutiny, asserting that he was merely fulfilling his role as an MP.
Meanwhile, Mr. Ablakwa expressed satisfaction with the explanations provided by the Bank of Ghana and the Liberian government regarding the transfer.
Central Bank of Liberia (CBL)has addressed the controversy regarding the recent transfer of US$20 million to Ghana’s central bank, the Bank of Ghana (BoG), following the disclosure of the documents by North Tongu Member of Parliament, Samuel Okudzeto Ablakwa.
In a statement released on Wednesday, August 28, 2024, and reviewed by GhanaWeb, the CBL confirmed that it is the rightful owner of the transferred funds.
The statement clarified that the US$20 million was sent to the BoG as part of an ongoing agreement under which the Bank of Ghana provides overnight custody for Liberia’s cash imports.
“The importation of United States dollars is part of the Bank’s normal function, which is required to meet the needs of the economy, including the USD withdrawal demands and needs of the Government of Liberia and the commercial banks.
“CBL and the Bank of Ghana (BoG) have a long-standing Cash Custody Agreement executed for the BoG to provide overnight custody for CBL imported cash when shipped from London by Travelex Currency, which is an international currency shipment company,” part of the statement reads.
It added, “These cash shipments by flights are cleared through both the Ghana and Liberia Customs, thus validating their legitimate sources.
The CBL once again emphasises its commitment to transparency and accountability and encourages the media to always reach out to the Bank to verify any information about the Bank’s operations before publication.”
Background:
Samuel Okudzeto Ablakwa, MP for North Tongu, has raised serious concerns regarding a US$20 million transfer to the Bank of Ghana, citing discrepancies in the documentation.
On August 27, 2024, Ablakwa posted on X about the situation, revealing that the US$20 million, which was cleared by the Ghana Revenue Authority (GRA), is intended for the Central Bank of Liberia.
According to Ablakwa, while official documents sent to the GRA indicate that the funds have been deposited with the Bank of Ghana for safekeeping until they can be transferred to Liberia, other documents from the Bank of Ghana suggest a different story.
Ablakwa is closely monitoring the situation to ensure that the funds are indeed forwarded to Liberia as intended and not retained by the Bank of Ghana as some documents might imply.
“I am keenly tracking the movement of some US$20 million cash which arrived in Ghana via KIA this afternoon. The cash has since been cleared by officials of the Bank of Ghana.
The Bank of Ghana must offer explanations on why supporting documents are not consistent with the content of its August 21, 2024, letter to customs and airport officials seeking to clear the uncirculated banknotes.
“Even though the Bank of Ghana claims the money was ordered by the central bank of Liberia and that the cash will be re-exported to Monrovia whenever there is an available flight, other intercepted documents, including an airway bill indicate emphatically that the consignee is the Bank of Ghana and not the central bank of Liberia.
He added, “My international partners and I will keep tracking this US$20 million cash from London to confirm if indeed the fresh banknotes will be transferred to Liberia, when the transfer will be carried out, and if the full amount will be transferred.”
The MP shared a document from theBank of Ghanaasking the GRA to clear the US$20 million, stating that it would be transferred to Liberia later.
He also shared an airline bill, which is supposed to show that the US$20 million belongs to the Bank of Ghana.
Bank of Ghanahas addressed concerns raised by MP Samuel Okudzeto Ablakwa regarding a $20 million transfer he questioned for inconsistent documentation.
In a statement dated Wednesday, August 28, the central bank criticised Ablakwa’s allegations, clarifying that the funds were designated for the Central Bank of Liberia, as previously disclosed.
While the statement didn’t explicitly name Ablakwa, it expressed disappointment over his decision to publicly share documents related to the transfer, implying that such actions were inappropriate and potentially misleading.
Bank of Ghanahas addressed concerns raised by MP Samuel Okudzeto Ablakwa regarding a $20 million transfer, clarifying that the funds were part of an agreement with the Central Bank of Liberia.
The bank criticised the public sharing of sensitive documents, calling it “unfortunate” and raising security concerns.
They emphasised that the transfer was executed according to standard procedures and assured the public that there was no misconduct involved.
The bank also urged caution when handling sensitive financial matters to avoid unnecessary alarms and risks.
“For the avoidance of doubt, the Bank of Ghana has had a long-standing currency transfer arrangement with the Central Bank of Liberia since 2004, and per this agreement, the Bank of Ghana receives imported currency on behalf of the Central Bank of Liberia for re-export to Monrovia.
The said Uncirculated Banknotes mentioned in the social media discussions on August 27 are part of this long-standing arrangement.
When all logistical arrangements, including scheduled flights, are finalised, these would be re-exported to the Central Bank of Liberia.
“As part of administrative processes and security protocols, all relevant stakeholders are officially informed of the entry and exit of consignments related to this arrangement.
Unless there is mischief intended, there was no reason for this matter to have become an issue for public discussion,” part of the statement stated.
“Currency management is a sensitive operation and has security implications; therefore, it is unfortunate that a lawmaker would circulate such sensitive procedural and administrative clearance letters involving another sovereign nation in a bid to misinform and disinform the public and attach a narrative that seeks to suggest some wrongdoing on the part of the Bank of Ghana.”
The arrangement between the Bank of Ghana and the Central Bank of Liberiasignifies mutual trust between the two countries and a testament to the strong bond of friendship between Accra and Monrovia,” the statement added.
Samuel Okudzeto Ablakwa, the North Tongu MP, raised concerns about a $20 million transfer to the Bank of Ghana, questioning the consistency of related documentation.
He pointed out that while Ghana Revenue Authority (GRA) documents indicated the funds were for safekeeping before being transferred to the Central Bank of Liberia, records from the Bank of Ghana suggested a different story.
Ablakwa is monitoring the situation to ensure the funds are properly transferred to Liberia and not retained by the Bank of Ghana as claimed.
The Bank of Ghana (BoG) has advised individuals to thoughtfully select their next of kin, emphasizing that the chosen person should not only be of legal age but also capable of providing necessary information about the account holder when required.
This guidance addresses a widespread misunderstanding that naming someone as the next of kin automatically grants them access to the account funds upon the account holder’s death.
According to a notice from BoG Secretary Sandra Thompson, specific legal steps must be taken by the next of kin to access the deceased’s account.
These steps include submitting a death certificate, letters of administration, or letters of probate.
“To inherit or have access to the account of a deceased customer, one will have to be named in the deceased customer’s Will as a beneficiary of the account, and a court of competent jurisdiction will have to grant Letters of Probate to empower the person who has been named in the Will as a beneficiary, to obtain access to the deceased customer’s account.
“Administrators of the estate of a person who dies intestate can be appointed through Letters of Administration (L.A.) issued by a court of competent jurisdiction, which grants access to a deceased customer’s account.
“Based on this understanding, it is important to choose a Next of Kin who is capable of providing relevant information about you, when the need arises. As much as possible we encourage the choice of Next-of-Kins to be of legal age,” part of the statement read.
The Bank of Ghana (BoG) has affirmed its commitment to maintaining a stringent monetary policy stance until inflation shows a consistent downward trend.
In July 2024, the Monetary Policy Committee of the BoG maintained the policy rate at 29.0% for the third consecutive time, as Ghana has experienced a fourth consecutive decline in the inflation rate. Currently, the inflation rate stands at 20.9%.
In a statement to the International Monetary Fund (IMF), the central bank outlined its approach, which aims to steer inflation back within its target range of 8 ± 2 percent.
BoG emphasized that its monetary policy decisions will remain data-driven to ensure a swift and controlled disinflation process toward the set inflation target.
“Our policy decisions will continue to be data-dependent to ensure a fast-paced and orderly disinflation path towards the inflation target; the BoG stands ready to adjust the policy stance to ensure inflation evolves as envisaged under our monetary policy consultation clause (TMU Section II),” the statement read.
Additionally, the central bank reiterated its commitment to absorbing excess liquidity and ensuring the policy rate effectively impacts the market.
“We are committed to continue absorbing excess liquidity and making sure our policy rate is fully transmitted to the market. In doing so, we will review the increased reliance on reserve requirements and the new tiering framework to ensure they deliver on their objectives,” the bank stated.
The BoG is also focused on enhancing its inflation-targeting framework, improving the Forecast and Policy Analysis System (FPAS), strengthening macroeconomic data collection (including the BoG inflation expectations survey), and sharpening its analytical capabilities and communication strategy.
As part of its broader strategy, the central bank aims to rebuild Ghana’s official international reserves to cover at least three months of imports by the end of the IMF program.
However, challenges in the cocoa sector, larger-than-expected payments to Independent Power Producers (IPPs), and uncertainties surrounding debt restructuring have prompted BoG to seek a modification of its Quantitative Performance Criteria (QPC).
The request includes adding an asymmetric adjustor to address unforeseen debt servicing needs related to bondholders and commercial creditors.
Despite these headwinds, BoG remains committed to adhering to its foreign exchange intervention budget as it works towards rebuilding reserves.
The Bank of Ghana’s Monetary Policy Committee has decided to keep the benchmark interest rate at 29 percent, a strategic choice intended to address inflation uncertainties caused by currency pressures, changes in utility tariffs, and increasing fuel prices.
Economic analysts have characterized this decision as a cautious approach to managing the economy during these challenging times.
In an interview with CNBC Africa, Karen Kwarteng, Head of Global Market Sales at Stanbic Bank Ghana, examined the effects of the central bank’s decision to maintain the benchmark rate at 29 percent.
She pointed out that although there was a previous 100-basis point rate cut, keeping the current rate is seen as essential to temper inflation and support disinflation efforts in the latter part of the year.
The Bank of Ghana has set an inflation target of 13 to 17 percent by the end of the year, in line with the government’s 15 percent goal.
Karen Kwarteng also emphasized the importance of strong fiscal consolidation as a complementary measure to monetary policy.
“Key government initiatives such as the Ghana.gov platform and the Ghana Integrated Financial Management Information System are pivotal in these efforts.”
The Standard Bank Executive further expressed optimism about the appreciation of the local currency in the near term, attributing this to the restructuring of the €13.1 billion bonds and anticipated IMF disbursements in November.
She noted that “These factors are expected to provide much-needed support to the currency despite ongoing challenges such as declining cocoa earnings, which have hampered the regulator’s capacity to intervene in the forex market.”
In recent times, high lending rates, driven by elevated reference rates, have continued to pose challenges for businesses in Ghana seeking affordable credit.
Nevertheless, Karen Kwarteng commended the resilience of Ghana’s banking sector, which has shown stability following the domestic debt restructuring program.
She also acknowledged that “Support from regulatory and governmental bodies has been instrumental in this recovery, enabling banks to navigate the post-restructuring landscape effectively.”
As Ghana navigates the challenges of inflation management and strives for economic stability, the collaboration between monetary and fiscal authorities will be crucial.
The focus on fiscal consolidation, prudent financial management, and strategic monetary policy is aimed at addressing current economic challenges and paving the way for a more resilient and sustainable future for the country.
The Bank of Ghana’s decision to hold the benchmark rate at 29%, therefore, reflects a strategic approach to managing inflation and economic stability.
With continued efforts in fiscal consolidation and supportive monetary policies, the country will likely overcome current economic challenges and achieve sustainable growth.
The resilience of the banking sector and optimism about currency appreciation further contribute to a cautiously positive outlook for the country going forward.
Bank of Ghana (BoG)has confirmed that the Gold for Oil policy introduced by the government is advancing according to schedule.
This initiative was implemented to tackle Ghana’s declining foreign currency reserves and the significant dollar demand from oil importers, which was negatively impacting the Cedi and increasing living expenses.
In a report to the Public Accounts Committee of Parliament on Monday, August 12, Dr. Maxwell Opoku-Afari, the First Deputy Governor of the Bank of Ghana, offered an update on the progress of the policy.
“The gold for oil programme is on track and the reason why the risk for the separate account is mitigated somehow is that the Central Bank’s participation in terms of financial contribution to the gold for oil is capped and nothing more is being added to that.
“So it is the receivables that are coming from within that cap amount that has been used to continue to finance the gold for oil programme.”
The Gold for Oil policy,as outlined by the government, involves settling payments for imported oil products with gold, facilitated through direct exchanges with gold acquired by the Central Bank.
The G40 Programme Framework, dated February 3, 2023, details the policy’s execution, which involves two payment methods: barter trade or using foreign exchange obtained from selling gold to a broker.
In the barter method, suppliers who agree to accept gold in exchange for petroleum products receive the equivalent amount of gold from the Bank of Ghana (BoG).
Alternatively, through the Broker Channel, the BoG enters into a gold supply agreement where it sells gold to a broker, who then provides the foreign currency needed to pay for the petroleum products.
Ghana Association of Banks (GAB) has urged the Bank of Ghana (BoG) to make public the names of businesses and individuals who have been penalized for issuing dud cheques.
The association argues that publishing these names in national newspapers is essential to reinstating confidence in cheques as a trustworthy payment method.
John Awuah, the Chief Executive of GAB, stressed during an interview on Joy News that such transparency would act as a significant deterrent, preventing others from engaging in the practice of issuing dud cheques.
“If someone sees their neighbor’s name on this list, it will ensure they avoid making the same mistake,” Awuah stated.
He noted that the individuals and businesses in question have repeatedly issued dud cheques over the years, highlighting that this practice is not only against central bank regulations but also constitutes a crime under the Criminal Offenses Act.
“Issuing dud cheques undermines trust in the payment system, which is why this issue is so critical,” Mr. Awuah stressed.
On August 6, 2024, the Bank of Ghana revealed that it had penalized 47 individuals and 245 businesses for repeatedly issuing dud cheques—at least three times—between January 2022 and January 2024, despite prior warnings.
As a consequence, these offenders have been prohibited from issuing cheques and accessing new credit facilities in Ghana for three years, starting from June 28, 2024.
Mr. Awuah cautioned that the continued issuance of dud cheques could result in a widespread rejection of cheques as a viable payment method, posing serious risks to the financial system.
He highlighted that numerous businesses have already incurred losses due to this practice and called on regulators to take decisive action to restore confidence in the payment system.
Echoing this concern, Seth Twum Akwaboah, CEO of the Association of Ghana Industries, expressed worries about the repercussions of the Bank of Ghana’ssanctions on businesses, particularly regarding their ability to secure new credit from banks over the next three years.
The Bank of Ghana (BoG) has revealed that more than $5 billion worth of gold reserves have been amassed under the Government’s Domestic Gold Purchase Programme since its launch in 2021.
By December 2023, the nation’s gold reserve build-up had reached 65.4 tonnes.
From January to June this year, the Central Bank acquired an additional 23 tonnes of gold, valued at approximately $1.6 billion, bringing the country’s total reserves to 73 tonnes.
A significant portion of this, $1.6 billion, was utilized as equity in the Government’s ‘Gold for Oil’ initiative, aimed at stabilizing the Cedi and curbing the rising demand for foreign currencies.
These details emerged during the official commissioning of the Royal Gold Ghana Limited (RGGL), a joint venture gold refinery, by Vice President Dr. Mahamudu Bawumia in Accra on Thursday.
The RGGL represents a collaboration between the Precious Minerals Marketing Company (PMMC) and Rosy Royal Limited, an Indian gold refinery firm.
At the unveiling ceremony of the $450 million refinery, Dr. Bawumia praised the PMMC and RGGL teams for the successful completion of the project. He emphasized that his administration would work on creating a policy framework to support the local currency with gold, thereby strengthening it against foreign currencies.
“It is with great joy that I address you today on the commissioning of the Royal Ghana Gold Refinery. This historic achievement in the natural resources sector, particularly in gold, marks a significant milestone in Ghana’s journey towards economic transformation and industrialization,” Dr. Bawumia remarked.
He highlighted the government’s commitment to adding value to the nation’s natural resources, creating jobs, and fostering sustainable economic growth. The partnership between the BoG and Rosy Royal Limited, he noted, symbolizes a shared vision for a prosperous future in Ghana’s precious minerals industry.
The state-of-the-art refinery, equipped with advanced technology meeting international standards, is expected to significantly enhance the country’s capacity to process gold locally, thereby increasing value-addition opportunities. The RGGL aims to achieve London Bullion Market Association (LBMA) accreditation within three years, provided it sources all its gold dore responsibly.
For over a century, Ghana has been exporting gold in its raw form, missing out on substantial revenue and job creation opportunities. Dr. Bawumia stressed that the current administration is determined to make value addition a crucial aspect of the country’s export strategy.
“The launch of this refinery is particularly important as it fulfills a key part of this vision. Originally, this vision was to be realized through a joint venture between the PMMC and RGGL, with the PMMC granting part of its land for the construction of the refinery,” Dr. Bawumia stated.
Construction of the refinery began in 2018 and was completed in 2022. Dr. Bawumia commended the efforts of the Board, Management, and staff of both the Bank of Ghana and PMMC for their unwavering support in bringing this national project to fruition.
“This refinery is a strategic investment that significantly contributes to the government’s efforts to add value to our mineral resources,” Dr. Bawumia emphasized.
Ghana’s annual gold production averaged 3.92 million ounces (122.5 tonnes) between 2018 and 2023, all of which was exported unrefined, leading to lost revenue and job opportunities. The new refinery is expected to create 80 to 120 direct jobs and up to 500 indirect employment opportunities, boosting domestic tax revenue through corporate taxes. It will also enable Ghana to refine gold to 24 carats, 99.99% purity—equivalent to a good delivery bar at the LBMA standard.
With the ability to locally refine gold, Ghana can now sell it at a more favorable price, retaining more of its economic value. Dr. Bawumia also noted that the government’s plan to refine all domestically produced gold would further enhance the country’s economic independence and resilience.
“With the BoG’s domestic gold purchase programme, which began in 2021, and this new refinery, we are positioning Ghana as the gold hub of Africa,” Dr. Bawumia asserted.
“This marks a new era for Ghana and ushers us into our vision of building a resilient economy anchored on our mineral resources in a golden age of natural resource governance,” he concluded.
The Institute of Statistical Social and Economic Research (ISSER) has called on the Bank of Ghana (BoG) to evaluate and address the informal forex market to eliminate unregulated activities that disrupt the country’s exchange rate regime.
In its 2024 Mid-Year Budget Review, titled “A Critical Assessment of the 2024 Mid-Year Budget,” ISSER emphasized the need for the Central Bank to intensify its efforts against illegal forex operations that contribute to exchange rate instability.
The report recommends that the Bank of Ghana work closely with security agencies to target and shut down unregistered businesses within the financial sector.
“Assess the size of the informal forex market and institute efforts to reduce its dominance and activities that drive exchange rate instability. The Bank of Ghana, in collaboration with law enforcement agencies, should clamp down on unregistered and unregulated businesses,” the review states.
Additionally, ISSER advised that both the central bank and fiscal authorities ensure that the Development Bank of Ghana offers affordable funding to the agricultural sector to stimulate the local economy.
“Effective monetary and fiscal policy coordination is needed to support macroeconomic stability and growth. The Bank of Ghana and fiscal authorities should strengthen their partnerships and institutional coordination with global and regional financial and economic institutions, development partners, and the private sector to unlock resources to catalyse and sustain economic recovery,” the report suggests.
Moreover, ISSER highlights the importance of providing lower-cost financing to the agricultural and light manufacturing sectors to enhance local production and export competitiveness.
“The central bank and the fiscal authorities should ensure that the Development Bank of Ghana provides a cheaper source of funding to the agricultural and light manufacturing sectors to support higher value addition. This will significantly enhance local industry’s ability to produce import substitutes and improve export competitiveness,” the review mentions.
The Bank of Ghana (BoG) is confident in its ability to protect the economy from external shocks due to a significant increase in reserves during the first half of the year.
This advancement also enhances the bank’s capacity to stabilize the foreign exchange market.
Governor Dr. Ernest Addison highlighted that the bank’s reserve levels have greatly improved, thanks to a favorable external payments balance and a surplus in the current account.
As of June 2024, the bank’s gross international reserves rose by $947 million to reach $6.87 billion, covering 3.1 months of imports. Meanwhile, net international reserves increased by $1.31 billion to $4.50 billion.
Dr. Addison attributed this strong reserve growth to the Domestic Gold Purchase Programme, which has accelerated the accumulation of reserves beyond what was projected under the IMF-supported initiative.
Economic outlook The bank observed that global economic activity exceeded expectations in the first quarter of 2024, with the IMF’s growth projections for advanced economies indicating steady performance.
Nonetheless, ongoing inflation in the services sector, driven by rising wages, may prompt central banks to maintain elevated interest rates for an extended period, potentially impacting growth outlooks.
Domestic economy Ghana’s GDP growth for the first quarter of 2024 exceeded expectations, with economic activity proving resilient despite a restrictive policy approach.
Job Openings
High-frequency indicators point to stronger growth prospects, although consumer and business confidence has weakened due to exchange rate depreciation and elevated food prices.
The bank anticipates a shift in these sentiments as the exchange rate stabilizes and macroeconomic stability improves, which should bolster economic activity.
Fiscal front On the fiscal front, the bank said fiscal policy implementation so far has been on track and aligned with the IMF programme.
However, it said staying on the course of the fiscal consolidation path for the rest of the year should lock in stability in the overall macroeconomic conditions.
Banking sector performance Concerning the banking sector’s performance, the bank noted that in the first half of the year, the sector showed signs of continued recovery from the effects of the Domestic Debt Exchange Programme.
Total assets in the banking sector increased by 33.3% to GH¢323.1 billion by the end of June 2024, compared to a 21.2% growth rate at the end of June 2023. Indicators of profitability, liquidity, and efficiency also saw improvements during this period.
The Capital Adequacy Ratio (CAR), after accounting for reliefs, remained steady at 14.3% from June 2023 to June 2024. Without reliefs, the CAR was 10.6% in June 2024, up from 7.4% in June 2023.
Despite these positive developments, the central bank highlighted that high credit risk continues to pose a challenge to the sector’s recovery.
The industry’s Non-Performing Loans (NPL) ratio stood at 24.1% in June 2024, an increase from 18.7% in June 2023.
Nevertheless, the bank expressed optimism that steady profit growth, adherence to recapitalization plans, and stringent credit underwriting standards would support the sector’s full recovery and resilience.
Regarding domestic price trends, the bank noted some uncertainty about the inflation trajectory for the year due to recent exchange rate pressures, increases in utility tariffs, and rising ex-pump fuel prices.
These factors have led to a slightly higher inflation outlook for the year. While inflation is expected to stay within the target range, there is a slight risk of it rising above the target.
To address this, the bank emphasized the need for maintaining a strong monetary policy stance coupled with robust fiscal consolidation efforts to achieve the year-end inflation goals.
Key statistics Gross International Reserves: US$6.87 billion (end-June 2024)- Net International Reserves: US$4.50 billion (end-June 2024)-
Current Account Surplus: Significantly improved, aided by strong gold exports, robust remittances, and debt suspension.
The International Monetary Fund (IMF) urges the Cabinet to prioritize adopting the amendments to the Bank of Ghana Act to enhance the Central Bank’s independence.
This recommendation comes in light of the Central Bank’s significant financial exposure to the Ghanaian government.
The IMF emphasizes that recapitalizing the Bank of Ghana should be approached cautiously, considering the fiscal limitations under the Economic Credit Facility program.
While the IMF acknowledges the Bank of Ghana’s dedication to a prudent monetary policy, it notes that further progress is required to implement the Fund’s safeguards assessment recommendations.
“A tight policy stance—supported by robust liquidity absorption operations—is warranted until inflation approaches the target band. Against the backdrop of the recent currency depreciation, the BoG should remain prudent to ensure a reduction in the still high and volatile inflation and re-anchoring of inflation expectations. Continued progress in advancing Fund’s advice on safeguards is also warranted”.
BoG should continue rebuilding international reserves
It continued that the BoG should continue rebuilding international reserves and accelerate reforms to its foreign exchange intervention framework.
While commending the large outperformance of reserves accumulation in 2023, the IMF noted that it is partially the result of temporary factors and that, going forward, limiting foreign interventions remains key to rebuilding external buffers.
It urged the BoG to adopt a formal internal foreign exchange intervention policy framework, implement all FX interventions through an open and price-based FX auction mechanism; and reform the cedi reference rate.
These measures, it believes, would better underpin exchange rate flexibility, and deepen the exchange rate market,
The Auditor-General’s 2023 report has urged the Bank of Ghana to take steps to recover GH¢8.241 billion that the Ghana Cocoa Board (COCOBOD) owes.
The report highlights that COCOBOD has consistently failed to meet its loan repayment obligations to the central bank.
By December 31, 2022, the outstanding principal amount had reached GH¢8.241 billion.
It suggested that the central bank should adopt measures to reduce its risk exposure to quasi-government entities and set up clear repayment schedules for future loans.
The report also recommended that the Bank of Ghana formalize its “Gold Purchase Programme” with the Precious Mineral Marketing Company (PMMC).
The Auditor-General pointed out the lack of a formal agreement for these transactions, which has left key details, such as fees or commissions paid to PMMC, unconfirmed.
It stressed the importance of having formal agreements for such transactions to ensure both transparency and accountability.
A recent analysis by economist Scott Bolshevik, has shed light on the Bank of Ghana’s (BoG) financial trajectory, revealing a decline in performance under President Akufo-Addo’s administration.
Taking to the X platform, he shared data from 2012 to 2023 illustrating a stark contrast between former president, John Dramani Mahama’s tenure and president Akufo-Addo.
His data revealed that in 2012, BoG recorded a profit of GH₵574 million, reflecting a stable and positive financial environment.
The following year, 2013, saw an increase in profit to GH₵713 million, continuing the positive trend and suggesting effective financial management and growth.
I apologize for the error in the stats.
The Bank of Ghana's losses were GH₵60.8 billion in 2022 not 2023 and GH₵10.5 billion in 2023 instead
I am facing significant criticism for this mistake, while the president is being hailed as the best president ahead of Nkrumah. https://t.co/Sxhrn5FVon
The year 2014 maintained profitability with GH₵580 million, though slightly lower than the previous year.
This was followed by a rise in 2015, where the bank achieved a profit of GH₵616 million, indicating ongoing stability.
In 2016, the bank’s performance improved further with a profit of GH₵813 million, demonstrating robust financial health.
The positive trend, however, reversed in 2017 when the Bank of Ghana reported a profit of GH₵929 million, the highest in this period.
Despite this peak, the financial outlook began to deteriorate the following year.
In 2018, the bank experienced its first significant loss of GH₵1.8 billion, signaling the beginning of financial troubles. The situation worsened in 2019, with losses escalating to GH₵3.1 billion.
This downward spiral continued into 2020, with the losses reaching a severe GH₵6.1 billion, highlighting critical issues in the bank’s financial management.
The year 2021 saw a reduction in losses to GH₵4.6 billion, but this was still substantial, reflecting ongoing financial instability.
The situation further deteriorated in 2022, with the Bank of Ghana reporting an unprecedented loss of GH₵60.8 billion, marking the peak of its financial crisis.
In 2023, the losses slightly decreased to GH₵10.5 billion, but this reduction did little to offset the previous years’ severe financial setbacks.
The 2023 Auditor General Report has called on the Bank of Ghana to recover GH¢8.241 billion owed by the Ghana Cocoa Board (COCOBOD).
The report highlights that COCOBOD has repeatedly defaulted on loans provided by the Bank of Ghana, resulting in an outstanding principal amount of GH¢8.241 billion as of December 31, 2022.
The Auditor General has recommended that the Central Bank establish policies to mitigate its exposure to quasi-government entities and ensure clear repayment plans are in place for loans.
Furthermore, the report urges the Bank of Ghana to formalize its “Gold Purchase Programme” agreement with the Precious Minerals Marketing Company (PMMC). The Central Bank had engaged PMMC to handle gold purchases and sales on its behalf.
However, the Auditor General found that a formal agreement for these transactions was missing.
“As a result, we could not confirm salient terms of the engagement including fees or commissions paid to PMMC for their services. Transactional relationships of this nature must be formalized with an agreement,” the report emphasized.
The Bank of Ghana (BoG) has defended its choice to persist with the new head office construction, despite facing a substantial loss of 10.50 billion cedis in 2023.
Last year, the Central Bank allocated $82 million to contractors for the ongoing project, even while grappling with financial difficulties.
The decision to continue with the project has been questioned, with MP Yusif Suleman challenging its practicality given the bank’s financial situation. Mr. Suleman voiced these concerns during a Public Accounts Committee session on Friday.
Stephen Opasa, Special Advisor to the BoG Governor, justified the continuation of the construction, arguing that the project is too advanced to be stopped now.
He pointed out that the bank’s losses were attributable to multiple factors, not just the construction costs.
Mr. Opasa acknowledged Mr. Suleman’s concerns but contended that halting the project at this stage would be inefficient and costly, given the contractors already engaged.
“The alternative was to stop the project. While we understand the perspective of minimizing losses, the losses in 2023 and 2022 were not solely due to this project. Halting it might not have been the best decision given the circumstances, with contractors actively engaged and the project significantly advanced.”
The Bank of Ghana’s defense arises as the institution is pursuing a government bailout to bolster its capital and advance its policy goals.
The Bank of Ghana (BoG) has justified its decision to proceed with the construction of its new head office, even as it reported a substantial loss of 10.50 billion cedis for the year 2023.
Despite the financial setback, the Central Bank allocated $82 million to contractors for the project over the past year.
The ongoing construction has drawn criticism, particularly from MP Yusif Suleman, who questioned the project’s feasibility in light of the bank’s financial difficulties. Suleman raised these concerns during a Public Accounts Committee hearing on Friday.
In response, Stephen Opasa, Special Advisor to the BoG Governor, defended the bank’s stance, explaining that halting the construction would have been impractical and costly. He noted that the project’s advanced stage and ongoing contractor engagements made it inefficient to pause.
Opasa acknowledged the MP’s concerns but argued that the losses incurred by the BoG in 2023 and 2022 were due to factors beyond the construction project.
He elaborated, “I hear you that maybe we could have stopped that project to reduce the losses, but contractors were still on site and all that and therefore stopping that I am not sure whether it would have been the best decision”
He compared the situation to a personal project, stating, “Maybe if it was your house, you could have stopped and when things got better, you continued, but contractors were on site. This is a project that was way advanced.”
As the Bank of Ghana continues its construction efforts, it is also seeking government assistance to bolster its capital and support its policy goals.
The Bank of Ghana (BoG) has defended its choice to proceed with the construction of a new head office, despite reporting a significant loss of 10.50 billion cedis in 2023.
Last year, the Central Bank paid $82 million to contractors for the project.
The decision has drawn criticism, with MP Yusif Suleman questioning the project’s viability given the bank’s financial difficulties. Suleman raised his concerns during a Public Accounts Committee hearing on Friday.
In response, Stephen Opasa, Special Advisor to the BoG Governor, argued that halting the project was not feasible due to its advanced stage.
He stressed that the bank’s losses were attributable to various factors beyond the construction costs.
Opasa acknowledged the MP’s concerns but asserted that stopping the project halfway would have been inefficient and more costly due to ongoing contractor commitments.
“The other alternative was to stop the project. So, I see your point in management but as I explained earlier the losses we incurred in 2023 and 2022 we know how they occurred. It is not because of this project that we incurred losses.
“I hear you that maybe we could have stopped that project to reduce the losses, but contractors were still on site and all that and therefore stopping that I am not sure whether it would have been the best decision.
“But I hear you clearly. Maybe if it was your house, you could have stopped and when things got better, you continued, but contractors were on site. This is a project that was way advanced,” he stated.
The BoG’s defense comes as the bank is also pursuing a government bailout to recapitalize and support its policy objectives.
The Supreme Court has upheld the Bank of Ghana’s (BoG) decision to revoke the operating license of Unicredit Ghana Limited.
In a unanimous ruling, the Supreme Court reversed the Court of Appeal’s decision and affirmed the High Court’s ruling, which had found that the BoG acted correctly in revoking the license under the relevant legal provisions.
On August 16, 2019, the BoG declared Unicredit Ghana Limited insolvent and revoked its license under section 123 of the Banks and Specialized Deposit-Taking Institutions
Act of 2016 (Act 930). This action was based on the company’s insolvency.
Hoda Holdings Limited, the majority shareholder of Unicredit, sought judicial review of the BoG’s decision at the Human Rights Division of the High Court, requesting an injunction against the bank’s interference.
Justice Gifty Agyei Addo of the High Court upheld the legality of the BoG’s decision, finding it in accordance with section 123 of Act 930 and not arbitrary.
Hoda Holdings then appealed to the Court of Appeal, which overturned the High Court’s decision. The appellate court, consisting of Justices Janapare A. Bartels-Kodwo, Merley Wood, and Gbiel Suurbaareh, ruled that the BoG had not followed the procedural requirements in section 16(3&4) of Act 930, which mandates a hearing before revoking a license.
Dissatisfied with this ruling, the BoG appealed to the Supreme Court, arguing that the Court of Appeal had misinterpreted the law.
The five-member panel of the Supreme Court, led by Chief Justice Gertrude Torkornoo and including Justices Mariama Owusu, Prof. Henrietta Mensa-Bonsu, Ernest Yao Gaewu, and Yaw Darko Asare, agreed with the High Court.
They confirmed that Unicredit was given written notice of its capital insufficiency and liquidity issues, along with an opportunity to respond, thus validating the BoG’s actions as compliant with legal standards.
“We are also satisfied that the revocation of UniCredit’s license was done in accordance with the stipulated law appearing on the face of the record, and therefore reversed the decision of the Court of Appeal while upholding that of the High Court.”
The Supreme Court has validated the Bank of Ghana’s (BoG) decision to cancel Unicredit Ghana Limited’s operating license.
In a unanimous ruling, the court overturned the Court of Appeal’s decision and confirmed the High Court’s verdict in Accra, which determined that the BoG did not err in revoking the license, having strictly adhered to legal procedures.
On August 16, 2019, the BoG declared UniCredit Ghana Limited insolvent and rescinded its license to operate as a savings and loans company, in accordance with section 123 of the Banks and Specialized Deposit Taking Institutions Act of 2016 (Act 930).
Hoda Holdings Limited, the majority shareholder of UniCredit, subsequently filed a petition with the Human Rights Division of the High Court, requesting a judicial review of BoG’s decision to revoke UniCredit’s license and an injunction to prevent the bank from disrupting UniCredit’s operations.
Justice Gifty Agyei Addo, presiding over the High Court, ruled that the notice of Unicredit’s license revocation was lawful since it cited section 123 of Act 930 and was based on insolvency, as specified by the same section.
The court further determined that the BoG’s action in revoking Unicredit’s license was reasonable and neither arbitrary nor capricious, as the records supported BoG’s claim of capital insufficiency.
Court of Appeal
Not satisfied with the decision, Hoda Holdings proceeded to the Court of Appeal to challenge the decision, and the court reversed the decision of the High Court.
The Court of Appeal comprising Justices Janapare A. Bartels-Kodwo, Merley Wood and Gbiel Suurbaareh had held that the Bank of Ghana in revoking the license of UniCredit under section 123 of Act 930 should have followed the steps provided in section 16(3&4) of Act 930.
It also held that the failure of the Bank of Ghana to comply with the procedure in section 16(3&4) of Act 930 meant that UniCredit was not given a hearing before its license was revoked.
Supreme Court
Unhappy with the Court of Appeal’s ruling, the BoG took their case to the Supreme Court, contending that the decision was not supported by the evidence and that the court had misinterpreted the meaning of section 16(7) of Act 930.
A five-judge panel of the Supreme Court, led by Chief Justice Gertrude Torkornoo and including Justices Mariama Owusu, Prof. Henrietta Mensa-Bonsu, Ernest Yao Gaewu, and Yaw Darko Asare, concluded that extensive communications indicated that UniCredit had received written notice regarding capital deficiencies and liquidity issues, along with proposed actions and a chance to respond in writing.
The Supreme Court stated it was convinced that the records clearly showed a hearing between UniCredit and the BoG occurred before UniCredit’s license was revoked.
“We are also satisfied that the revocation of UniCredit’s license was done in accordance with the stipulated law appearing on the face of the record, and therefore reversed the decision of the Court of Appeal while upholding that of the High Court.”
The Minority in Parliament has postponed its planned protest against the Governor of the Bank of Ghana (BoG), Dr. Ernest Addison, and his two deputies.
The demonstration, originally scheduled for July 30, will now take place on August 13.
In a letter addressed to the police on July 23, the Minority cited the launch of the National Democratic Congress’s (NDC) 2024 campaign in Tamale on July 27 as the reason for the delay.
Many Minority members will be participating in the campaign launch, leaving them inadequate time to prepare for the protest.
The letter, signed by Dr. Casiel Ato Forson, noted “following our discussion and conclusion of the date with your office, the National Democratic Congress (NDC) announced the 27th of July 2024 as the date of the launch of our national campaign in Tamale.”
“Given that this date is so close to our planned demonstration in Accra, the 27th July date has become inconvenient.”
The Minority requested the rescheduling of the protest, citing sections 1, 2, and 3 of the Public Order Act 1994 (Act 491).
“Pursuant to sections 1, 2, and 3 of the Public Order Act 1994 (Act 491), I hereby write to request for the rescheduling of the demonstration from its original date of Tuesday 30th July, 2024 to Tuesday 13th August, 2024, between the hours of 8:00am and 6:00pm. The route remains the same,” the letter signed by Dr Casiel Ato Forson stated.
The Director of Communications for the Bank of Ghana (BoG) has addressed recent concerns by confirming that the Central Bank provided significant support to GN Bank during its liquidity issues.
He explained that the BoG collaborated closely with GN Bank, especially after GN Bank’s request to be reclassified as a Savings and Loans institution.
The decision to revoke the licence of GN Savings and Loans was described as a necessary measure to safeguard the integrity of the banking industry.
“We tried to take our time with the case of GN Bank. When depositors started shouting all over the country because the Savings and Loans company could not meet depositors withdrawals it was time to act,” Mr Otabil said.
Adding “Aside from the reported cases in the media, the Financial Stability Department of the Bank of Ghana received complaints of the company’s inability to pay their deposits on demand. To ensure an orderly exit of the company and protect the sanctity of the banking sector, the company’s licence had to be withdrawn in accordance with the provisions of the Banks and Specilised Deposit-Taking Institutions, Act 2016 (Act 930)”.
Mr. Otabil emphasized that the BoG has detailed the infractions that led to the revocation of GN Savings and Loans’ licence.
GN Bank, unable to meet the revised minimum capital requirement of GHS400 million by December 31, 2018, sought reclassification to a Savings and Loans company, which the BoG approved.
However, by August 2019, the BoG had to revoke the Savings and Loans licence after continued liquidity problems and customer complaints were brought to the attention of the Financial Stability Department.
The Bank of Ghana (BoG) has reaffirmed its commitment to maintaining the integrity and stability of the financial system.
The central bank announced that it will continue to work closely with law enforcement agencies to target illegal deposit-taking activities, ensuring that those involved are prosecuted under the law.
This assurance follows the recent closure of Dek-Nock Investments by the Ghana Police Service, in collaboration with the Bank of Ghana.
Effective July 19, the business, which operated in Nungua and Ashaiman in the Greater Accra Region, was shut down for unauthorized deposit-taking, a violation of Section 6(1) of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930).
The Bank of Ghana confirmed that investigations into Dek-Nock Investments are ongoing.
Customers of the company have been advised to stay calm while the situation is resolved, and the public will be updated on further actions as they occur.
“All customers of Dek-Nock Investments are urged to remain calm while investigations continue. The general public and all stakeholders will be kept informed of the next line of action.
“In collaboration with the respective Law Enforcement Agencies, the Bank of Ghana will continue to clamp down on illegal deposit-taking operations and all offenders shall be dealt with in accordance with the law.
“The Bank assures the general public of its commitment to promoting the integrity and stability of the financial system,” the statement said.
Dozens of Ghanaians are in a state of shock and agony after the Ghana Police Service and the Bank of Ghana (BoG) closed down Dek-Nock Investments, located in Nungua and Ashaiman in the Greater Accra Region.
The closure, which took place on July 19, 2024, was executed in accordance with Section 20(2)(g) of the Banks and Specialised Deposit-taking Institutions Act, 2016 (Act 930).
The BoG released a statement indicating that Dek-Nock Investments was involved in unauthorized deposit-taking activities, a violation of Section 6(1) of Act 930.
“The Ghana Police Service is conducting further investigations into the operations of Dek-Nock Investments,” the statement said.
In a video gone virial on social media, several customers beseeched the company’s premises demanding for their money.
Several customers of Dek-Nock Investment gathered in front of the Nungua-Buade branch, demanding their cash after the Bank of Ghana, in collaboration with the Ghana Police, closed down the office for operating without a license earlier today. pic.twitter.com/HLxJTTvefm
The BoG has urged customers of Dek-Nock Investments to remain calm as investigations continue, assuring that the public and all stakeholders will be kept informed about the next steps.
The statement emphasized the BoG’s commitment, in collaboration with law enforcement agencies, to clamping down on illegal deposit-taking operations. Offenders will be prosecuted to maintain the integrity and stability of the financial system.
“The Bank assures the general public of its commitment to promoting the integrity and stability of the financial system,” the statement affirmed.
For further information, inquiries can be directed to the Other Financial Institutions Supervision Department of the Bank of Ghana via telephone numbers 0302-666174-6.
Ghana Police Service has collaborated with the Bank of Ghana (BoG), to shut down Dek-Nock Investments, which operated in Nungua and Ashaiman within the Greater Accra Region
The action which took place on July 19, 2024, is in accordance with Section 20(2)(g) of the Banks and Specialised Deposit-taking Institutions Act, 2016 (Act 930).
According to a statement from the BoG, Dek-Nock Investments was involved in illegal deposit-taking activities, violating Section 6(1) of Act 930.
“The Ghana Police Service is conducting further investigations into the operations of Dek-Nock Investments”, it said.
The statement urged all Dek-Nock Investments customers to stay calm as investigations proceed.
“The general public and all stakeholders will be kept informed of the next line of action”.
The Bank of Ghana has pledged to work with relevant law enforcement agencies to persistently combat illegal deposit-taking activities, ensuring that all violators are prosecuted according to the law.
“The Bank assures the general public of its commitment to promoting the integrity and stability of the financial system”.
“Kindly direct any enquiries and further information to the Other Financial Institutions Supervision Department of Bank of Ghana. You may call telephone numbers 0302-666174-6”, the statement concluded.
Governor of the Bank of Ghana (BoG), Dr. Ernest Addison, has emphasized recent positive economic indicators indicating a recovery during his address at the SME Growth and Opportunity Summit in Accra on July 16, 2024.
The Governor pointed to data from independent sources supporting arguments for economic stabilization.
Addressing attendees, Dr. Addison highlighted the stabilization of the exchange rate following uncertainties related to debt restructuring negotiations with external creditors. He attributed this stability in part to the successful performance of the Bank of Ghana’s Gold Purchase program.
Regarding Ghana’s Gross International Reserves, Dr. Addison reported a significant improvement, noting that by the end of April 2024, reserves had increased to US$6.59 billion, providing a 3.0 months import cover, compared to US$5.91 billion at the end of December 2023.
Dr. Addison underscored the BoG’s commitment to supporting small and medium-sized enterprises (SMEs), acknowledging their crucial role in Ghana’s economy. He announced ongoing initiatives, including a collaborative study with the Development Bank of Ghana and the University of Ghana Business School, aimed at understanding SME constraints and formulating targeted policies to foster growth.
Furthermore, the Governor urged increased investment in the SME sector to boost Ghana’s exports, emphasizing the potential of SMEs in driving economic expansion and job creation. He assured stakeholders of the BoG’s continued efforts to enhance SMEs’ access to financial services and digital literacy training, thereby facilitating their integration into cross-border trade activities.
In conclusion, Dr. Addison reaffirmed the Bank of Ghana’s commitment to implementing comprehensive financial development programs that support SMEs, promote economic stability, and contribute to Ghana’s sustainable growth trajectory.
A finance expert affiliated with the Centre for Social Justice (CSJ), Haruna Alhassan, has underscored the urgent need for Ghana’s central bank to revise upward the minimum capital requirement for banks.
Speaking at the 13th Leadership Dialogue Series themed “Ghana’s Economy from 2025 – 2028: The Hard Choices,” Alhassan highlighted the detrimental impact of debt exchange and currency depreciation on banks’ financial strength.
According to Alhassan, the current minimum capital levels, set at GH¢400 million during the Bank of Ghana’s recapitalization exercise between 2018 and 2019, have significantly eroded due to cedi depreciation.
What was once equivalent to $100 million has now dwindled to less than $40 million in today’s terms, marking a nearly 60% loss in capital value for Ghana’s banking sector.
“The existing minimum capital requirements no longer suffice for banks to independently finance critical projects,” stated Alhassan, stressing the necessity for a recalibration to bolster the sector’s resilience. He cautioned against a uniform approach to setting new capital thresholds, recognizing varying capacities among banks.
Alhassan also addressed Ghana’s foreign exchange challenges, advocating for stricter controls over reserves to prioritize essential imports amid the cedi’s steep depreciation.
The Ghanaian currency has experienced a notable 14% decline against the dollar by May 2024, exacerbated by supply shortfalls in forex markets.
He criticized excessive spending on non-essential imports like artificial and human hair, emphasizing the need to redirect resources towards vital machinery and equipment imports crucial for economic development.
The Leadership Dialogue Series, a flagship event of CSJ aimed at fostering civic education and political engagement, provided a platform for Alhassan to delve into these critical economic issues.
His proposals come amidst widespread economic concerns in Ghana, including high inflation rates and a sluggish economy, which have dampened business confidence and growth prospects.
Georgina Danso, a Ghanaian businesswoman, echoed these sentiments during the event, highlighting the detrimental impact of economic instability on local enterprises.
She urged the incoming government to take decisive action to inspire confidence and stimulate economic recovery, emphasizing the need for substantive measures over rhetorical assurances.
The current economic challenges faced by Ghana, including inflationary pressures and currency volatility, have sparked debates over the government’s economic policies and management practices.
While external factors like the Russia-Ukraine war and the Covid-19 pandemic have been cited as contributing factors, critics argue for more robust economic strategies and accountability measures to mitigate ongoing hardships.
Finance expert at the think tank Centre for Social Justice (CSJ), Haruna Alhassan, has stated that the central bank will need to increase the minimum capital requirement for banks under the next government to strengthen the nation’s financial sector.
In his keynote address at the 13th Leadership Dialogue Series, “There are currently banks with minimum capital that really cannot finance impact-making projects on their own and sometimes even when they come together,” the Fellow of the CSJ Finance Pillar said.
Between 2018 and 2019, the Bank of Ghana required banks to have a minimum capital of GH¢400 million, which was equivalent to $100 million at that time.
Due to the depreciation of the cedi, GH¢400 million now amounts to less than $40 million. Haruna Alhassan highlighted that this nearly 60% reduction in capital reflects substantial erosion of the banking sector’s capital in Ghana.
“For banks to be able to have that same strength as we envisaged in 2018 and 2019, we would need to look at raising the minimum capital requirements,” he stated.
He further noted that when a new minimum capital requirement is implemented, some banks might face difficulties, so the Bank of Ghana should avoid a “one-size-fits-all” approach.
The Leadership Dialogue Series, where Haruna Alhassan gave his address, is the premier civic education program of the CSJ, a left-leaning policy think tank. This annual event seeks to foster broad political participation and patriotic values through stimulating discussions with experts and prominent national figures.
In his informative virtual speech, Alhassan recommended that the Bank of Ghana limit the use of the country’s foreign exchange reserves to essential commodities or critical imports to mitigate the rapid depreciation of the cedi.
The Ghana cedi has been on a notable decline, worsening since last year. By May 2024, the cedi had depreciated by 14% against the dollar. Partly due to shortages in foreign exchange supply, the local currency, which was valued at GH¢11.97 to a dollar in January and GH¢12.33 in the retail market, had dropped to GH¢15.66 per dollar on the retail market by July 11, 2024.
“I don’t see why we should be spending so much hard cash importing artificial and human hair when we need that money to import machinery…this is a situation where we don’t have enough money, we don’t have enough FX,” Alhassan said.
Prior to Haruna Alhassan’s keynote address at the virtual event, which was streamed live on Facebook, YouTube, and Zoom, Georgina Danso, a Ghanaian businesswoman, spoke about how businesses are managing challenges like high inflation, partly due to the depreciating cedi.
Danso noted that the current economic climate has led to a loss of optimism within the business community and urged the next government to inspire and rejuvenate confidence in the private sector.
“Not just with impressive oratory tossed around… we are talking about a government that will actually take action,” she reiterated.
Since 2019, President Nana Akufo-Addo’s administration has grappled with record-high inflation, exacerbated by a rapidly depreciating local currency and a sluggish economy.
Though excessive borrowing, corruption, poor economic decisions, and mismanagement are often cited as causes for the current issues, the government attributes the situation to the Russia-Ukraine war and Covid-19. Many independent analysts, however, dispute this justification.
The Bank of Ghana (BoG) has reported a notable decrease in customer complaints lodged against banks, specialized deposit-taking institutions (SDIs), other financial institutions, and payment systems and service providers in 2023.
According to their 2023 Complaints Management Report, a total of 695 complaints were received throughout the year, marking a 29% reduction from the 983 complaints recorded in 2022.
Despite the decrease in overall complaints, the report highlighted that the complexity of complaints had increased, requiring more time and effort for resolution by the Bank of Ghana.
Out of the 695 complaints received in 2023, 458, constituting 66% of the total, were successfully resolved by the end of the year. This reflects a slight improvement from the 64% resolution rate achieved in 2022.
The preferred channel for lodging complaints was predominantly email, which accounted for 42% (291 complaints) of the total complaints received in 2023. This was followed by walk-in complaints, which made up 26% (179), and postal submissions at 21% (148). Phone calls constituted 10% (71), while a minimal 1% (6 complaints) were submitted via WhatsApp.
According to the report, the popularity of email as a complaints channel is attributed to its convenience in allowing complainants to submit supporting documentation alongside their grievances. This facilitates a more comprehensive and efficient handling of complaints by the Bank of Ghana.
The Bank of Ghana remains committed to improving its complaints resolution process, aiming to address customer concerns promptly and effectively across the financial sector. As the complexity of complaints continues to evolve, efforts are underway to enhance complaint management strategies and ensure fair outcomes for all stakeholders involved.
The decline in total complaints for 2023 reflects both positive trends in customer satisfaction and ongoing challenges in the financial services sector, underscoring the importance of robust complaint resolution mechanisms in maintaining trust and accountability within Ghana’s financial industry.
The Bank of Ghana (BoG) has issued a firm reminder to banks, Specialised Deposit-Taking Institutions (SDIs), and the general public regarding the stringent criteria for holding key positions within Regulated Financial Institutions (RFIs).
The reminder specifically underscores that individuals implicated in the 2017-2019 financial sector clean-up, as well as former directors of failed banks and SDIs since the enactment of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930), are ineligible to hold significant roles under the “fit and proper person” criteria.
In a recent notice, the BoG highlighted the importance of maintaining the gains achieved through the financial sector clean-up, which was necessitated by poor corporate governance and imprudent risk-taking that led to the collapse of several RFIs.
To address these issues, the BoG introduced the Corporate Governance Directive in 2018 and the Fit and Proper Persons Directive in 2019, aimed at reinforcing sound corporate governance practices and entrenching the central bank’s gatekeeping role.
To further bolster governance disclosure practices, the BoG issued the Corporate Governance Disclosure Directive in 2022, aligning with Pillar III of the Basel Capital Accord, which relates to regulatory and public disclosures. These measures are designed to ensure transparency and accountability within the financial sector.
The BoG’s notice reiterated that significant stakeholders, directors, and key management personnel must always possess good repute and demonstrate sufficient knowledge, skills, and experience to fulfill their duties in accordance with the Fit and Proper Persons Directive, 2019.
The directive sets forth rigorous standards, including assessing whether a person has previously been a director or involved in the management of any institution that:
Had its license revoked,
Has been or is being wound up by a competent court or authority, within or outside Ghana,
Has gone into receivership, insolvency, or involuntary liquidation.
The central bank emphasized the importance of these standards in safeguarding the integrity and stability of Ghana’s financial sector.
By enforcing these criteria, the BoG aims to promote the safety and soundness of RFIs, ensuring that only individuals of high ethical and professional standards are entrusted with leadership roles.
The BoG’s notice serves as a crucial reminder to all stakeholders to adhere to these directives and ensure that the financial sector remains robust and resilient.
Banks, SDIs, and the general public are encouraged to take note of these regulations to maintain the trust and confidence of depositors and investors.
The Bank of Ghana (BoG) has reiterated that poor corporate governance was a significant factor contributing to the excessive and irresponsible risks taken by some financial institutions, which ultimately necessitated a comprehensive clean-up exercise in 2017.
This clean-up was essential to secure depositors’ funds and protect the integrity of the financial sector.
To prevent a recurrence of these issues, the BoG introduced several directives aimed at bolstering corporate governance within the financial sector.
In 2018, the Corporate Governance Directive was issued, followed by the Fit and Proper Persons Directive in 2019. These measures were designed to embed sound corporate governance practices in Regulated Financial Institutions (RFIs) and to reinforce the BoG’s gatekeeping role within the sector.
Furthermore, to enhance governance disclosure practices by RFIs, the BoG released the Corporate Governance Disclosure Directive in 2022. This directive outlines regulatory expectations under Pillar III of the Basel Capital Accord, focusing on regulatory and public disclosures.
A statement issued by the BoG on July 11, 2024, reaffirmed that significant shareholders, directors, and key management personnel must always be of good repute and possess the necessary knowledge, skills, and experience to fulfill their duties in accordance with the Fit and Proper Persons Directive, 2019.
The Fit and Proper Standards, as outlined in the directive, consider various criteria to ensure the integrity of individuals in these roles.
This includes assessing whether a person has previously been a director or directly involved in the management of a company or institution whose license was revoked, or which was wound up by a competent court or authority, either within or outside Ghana.
The standards also evaluate if a person has been associated with a financial company that has gone into receivership, insolvency, or involuntary liquidation.
The BoG’s notice emphasized the obligation of RFIs, under the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930) and the Fit and Proper Persons Directive, 2019, to ensure the ongoing fitness and propriety of significant shareholders, directors, and key management personnel.
Importantly, the BoG reminded the public that individuals directly implicated in the 2017-2019 financial sector clean-up, as well as former directors of failed banks and Specialized Deposit-taking Institutions (SDIs) since the enactment of Act 930, are not eligible to hold key positions under the fit and proper persons criteria.
“Banks, Specialized Deposit-taking Institutions, and the general public are to note the above for their information,” the statement concluded.
The Minority caucus in Parliament has formally informed the Ghana Police Service of their plans to stage a protest demanding the resignation of the Governor of the Bank of Ghana (BoG), Dr. Ernest Addison, and his two deputies.
Mahama Ayariga, Member of Parliament for Bawku Central, sent a letter to the Greater Accra Regional Police command outlining their grievances and intentions.
The protest is scheduled for Tuesday, July 30, 2024, from 8 am to 6 pm in Accra, Greater Accra Region.
Starting at Obra Spot in Kwame Nkrumah Circle, the demonstrators will march through Adabraka to Kingsway and culminate at the Bank of Ghana headquarters.
The protest is centered around concerns regarding the ongoing construction of the BoG’s new headquarters in North Ridge.
“The Governor of the Central Bank and his board continue to engage in wasteful spending on the new Bank of Ghana Corporate head office building and refuse to answer questions on the latest cost of the building which, we are told, has now further escalated to over Two Hundred and Seventy Million United States Dollars (USD$270 million) from its original estimated cost of USD81,882,640.00.
“The Governor again has embarked on the construction of a new house for the Governor himself at a speculated cost of Forty Million United States Dollars (USD$40million) and has refused to disclose to us the actual cost when the Minority wrote to him requesting the information on the cost of the Governor’s house under construction.”
The caucus members organized a comparable protest on October 3, 2023, in response to the Bank’s reported GH¢60.81 billion loss in the 2022 fiscal year.
“Governor Addison has acted illegally in printing money for government without recourse to Parliament and similarly wrote off about GH¢48.4 billion of government debt. After the BoG recorded a colossal loss of over GH¢60.8 billion and negative equity of over GH¢55 billion we concluded that the bank has become insolvent. This is now confirmed by the BoG request for recapitalization by Central Government,” the Minority’s letter added.
The Institute of Economic Affairs (IEA) is urging substantial revisions to the Bank of Ghana Act 2016, with a particular focus on extending the tenure of the Central Bank Governor.
This move is aimed at ensuring continuity and shielding the position from the influence of presidential terms.
During a Stakeholders’ Forum titled “Reviewing the Bank of Ghana’s Act to Promote Transparency, Accountability, and Effectiveness,” Senior Scholar Prof. Alexander Bilson Darku presented the IEA’s viewpoint.
He stressed the necessity of protecting the Central Bank from excessive governmental interference, particularly concerning the Governor’s tenure and conditions of service.
Prof. Darku asserted that the proposed amendments would bolster Ghana’s economic stability by enhancing the independence and operational effectiveness of the Bank of Ghana.
“Maintaining the autonomy of the Governor is paramount for ensuring the transparency, accountability, and overall effectiveness of the Central Bank,” he noted.
The forum delved into several critical aspects, including the composition of the Bank of Ghana’s board, the Governor’s appointment process, and the regulatory framework governing lending limits to the government.
A consensus emerged on the importance of aligning the Governor’s term with that of the President to promote continuity and effective governance.
“There was a consensus on the necessity for Ghana to carefully consider aligning the term of the Bank of Ghana Governor to overlap with that of the President to ensure continuity and effectiveness in governance,” Prof. Darku explained.
The IEA’s call for amendments highlights the need for a more insulated and stable leadership at the Bank of Ghana, aiming to foster a regulatory environment that can withstand political pressures and maintain its focus on economic stability and growth.
National Communications Officer for theNational Democratic Congress (NDC), Sammy Gyamfihas reiterated government’s intention to introduce what he describes as Bank of Ghana (BoG) recapitalization tax.
An add-on to it’s about fifty taxes introduced since his assuming office in 2017.
During an interview with TV3’s Captain Smart on Onua TV’s Maakye Show, he revealed that, government plans introduce a levy to aid the recapitalization of the Central Bank. Nobody he said would be excluded he added.
“They will call it Bank of Ghana (BoG) recapitalization levy. They would add it to your VAT, everyone would be made to pay.
As they have printed money and spent it recklessly among themselves, they are coming tax, trotro drivers, fisherfolks, among other informal sector workers to raise money to go fix their self induced mess” he noted.
He went on to slam the government over the huge sum of money pumped into the new Bank of Ghana headquarters which is currently still under construction.
Highlighting the incompetence of the incumbent government and the deteriorating value of the Ghana Cedi against the dollar, he jabbed that,
“Amid this they have awarded a contract in dollars, $250 million when they are after people charging in dollars because they aren’t even confidence in their ability to sustain the dollar hence they have awarded a contract in dollars which is equivalent to GHS 3 billion” he added.
Asuwearigad, if Akufo Addo and Bawumia gov't makes a mistake and propose to introduce this throat cutting levy, your guess is as good as mine. pic.twitter.com/HTuStKsm1M
— The Second Coming Of JM (@MotiaNframa) July 1, 2024
He went on to express his frustration over the perceived misuse of public funds.
“You just can’t make sense of this, its become so cheap, that everyone is dipping their hands into state coffers. So Akufo-Addo did you come to solve Ghana’s problems or you came to came to become a problem for Ghanaians to solve?
What crime did we commit against these people(NPP)? where did we go wrong? I weep when I sit to read these documents. What Ghana is going through is a rape of our public purse.
Sammy Gyamfi’s revelation is a reiteration ofNDC’s Ato Forson’s claims about a year ago.
It will be recalled that in 2023, the Minority Leader in Parliament, Dr. Cassiel Ato Forson during a press conference on August 9, 2023 announced government’s intention to introduce a new tax in addition to it’s about fifty since his assuming office in 2017.
Colleagues, ladies and gentlemen of the media, fellow countrymen and women let me assure you that very soon Ghanaians would be made to pay for Bank of Ghana recapitalisation levy.
A tax to recapitalise the central bank of Ghana. So as we speak the Central Bank has collapsed.
The Bank of Ghana (BoG) has refused to disclose the total cost of its new head office building to Bawku Central MP, Mahama Ayariga.
In response to Mr. Ayariga’s inquiry for comprehensive financial details about the construction project, the BoG directed him to the Public Procurement Authority (PPA) for further information.
The BoG stated that their decision to withhold the full financial breakdown is based on procedural requirements that specify such information must be obtained through the PPA.
In a letter to the lawmaker, the BoG stressed that all procurement processes and financial transactions for the new head office have adhered to established regulatory frameworks and oversight mechanisms.
“With the approval of the Public Procurement Authority (PPA), the BoG awarded a contract for the construction of a bank duty post, at the premises of the old BoG clinic.”
“The BoG went through the necessary procurement processes in accordance with the Public Procurement Act, 2003 (Act 663) as amended by the Public Procurement Amendment Act, 2016 (Act 914) in 2022. The cost and details of the construction may be obtained from the PPA,” an excerpt of the letter said.
An advocate for transparency in government projects, Mahama Ayariga, voiced his dissatisfaction with the BoG’s reply.
He contends that as a public entity, the BoG is duty-bound to offer clear and comprehensive details regarding the expenses for the new head office.
Mr. Ayariga asserts that transparency is essential to uphold accountability and public confidence in the stewardship of national resources.
The BoG’s new head office project has attracted public interest and scrutiny, with numerous stakeholders demanding more disclosure of the project’s financial details.
The refusal to reveal the complete cost directly has ignited further discussion about the transparency and accountability of public entities in Ghana.
The Governor of the Bank of Ghana (BoG), Dr. Ernest Addison, has announced plans for the recapitalization of the central bank, aimed at bolstering its credibility amidst ongoing financial challenges and structural reforms.
Dr. Addison made this disclosure during a joint press conference in Accra on July 1, 2024, attended by representatives from the Ministry of Finance and the International Monetary Fund.
Speaking at the conference, Dr. Addison emphasized the necessity of recapitalization to support planned reforms outlined in a memorandum of understanding (MoU) between the Bank of Ghana and the Ministry of Finance.
The MoU, expected to be signed soon, aims to address the central bank’s financial losses, which totaled GHS 10.5 billion in 2023 and GHS 60.9 billion in 2022.
“The recapitalization of the central bank will strengthen its credibility and enable it to effectively fulfill its mandate of managing monetary policy and ensuring price stability,” Dr. Addison stated.
He highlighted the importance of steadfastness and commitment in implementing structural reforms throughout the year to restore the bank’s financial health and operational capacity.
The recapitalization plan will include determining the required capital, establishing a timeline for recapitalization, and identifying sources of funding.
Dr. Addison underscored that these measures are crucial for safeguarding the Bank of Ghana’s ability to fulfill its critical role in the nation’s economic stability.
In August 2023, Minority Leader Dr. Cassiel Ato Forson accused government of planning to impose a Bank of Ghana (BoG) recapitalization levy on Ghanaians.
He alleged that this levy is intended to shore up the central bank, which he claims is on the brink of collapse due to mismanagement.
The National Democratic Congress (NDC) demanded the immediate resignation of BoG Governor Dr. Ernest Addison and his deputies, holding them responsible for the reported GH¢60 billion losses in 2022.
The Bank of Ghana (BoG) has declined to disclose the complete cost of its new head office building to Mahama Ayariga, Member of Parliament for Bawku Central.
In response to Ayariga’s request for detailed financial information regarding the construction project, the BoG redirected him to the Public Procurement Authority (PPA) for further clarification.
Citing procedural protocols, the BoG stated that all financial details related to procurement processes must be accessed through the PPA.
The central bank emphasized that the construction contract for the new head office was awarded with the approval of the PPA, adhering to the stipulations of the Public Procurement Act, 2003 (Act 663), as amended by the Public Procurement Amendment Act, 2016 (Act 914).
In a letter to Mr Ayariga, the BoG underscored its commitment to transparency and compliance with regulatory frameworks governing public expenditures.
The excerpt from the letter read, “The BoG went through the necessary procurement processes in accordance with the Public Procurement Act, 2003 (Act 663) as amended by the Public Procurement Amendment Act, 2016 (Act 914) in 2022. The cost and details of the construction may be obtained from the PPA.”
Mahama Ayariga, known for advocating transparency in government projects, expressed dissatisfaction with the BoG’s response.
He argued that as a public institution, the BoG has a responsibility to provide clear and comprehensive information about expenditures on its new head office.
Mr Ayariga stressed that transparency is crucial for fostering accountability and maintaining public trust in the management of national resources.
Each of the 10 board members of the Bank of Ghana (BoG) received GH¢510,000 in allowances last two years, as reported in the central bank’s 2022 audited annual report and financial statement.
This occurred despite the board presiding over a GH¢60 billion unprecedented loss.
According to the report, “fees and allowances paid to non-executive directors during the year amounted to GH¢5.10 million.”
In the year when the central bank recorded its worst performance in recent history, each board member received an average of GH¢42,500 monthly, totaling GHC510,000 annually—a 60.9% increase compared to 2021.
In addition to the governor and his two deputies, these 10 board members constitute the governing board of the bank, as mandated by the Bank of Ghana Act, 2002 (Act 612).
The Board is entrusted with formulating policies critical to achieving the bank’s objectives and provides strategic direction on its operations.
It convenes at least once every two months to deliberate on matters within its statutory responsibilities and those referred to it.
But who were these board members?
The Bank of Ghana (BoG) released its full-year 2022 audited financial statements on July 28, 2023, which drew widespread criticism due to the substantial loss reported.
According to the financial statements, the bank recorded a total loss of GH¢60 billion.
This figure has unfortunately been subject to politicization, with GH¢53.1 billion of the losses attributed directly to the government’s domestic debt restructuring exercises (phase 1 and II), as clarified by the BoG.
In terms of compensation, Ghana’s non-executive directors at the central bank receive some of the highest emoluments on the continent.
On average, they are compensated more favorably than their counterparts in South Africa, Botswana, Mauritius, and Rwanda.
Annual emoluments received by non-executive board members in Ghana, South Africa, Mauritius, Botswana, and Rwanda in 2022 exemplify this trend.
In Kenya, Uganda, and Zambia, where the compensations of executive directors are combined with those of non-executive directors, Ghana’s figures remain competitive. However, Nigeria and Sierra Leone compensate their central bank directors at significantly higher rates.
The Fourth Estate converted the GH¢5.1 million received by the BoG’s non-executive board members into U.S. dollars for seamless comparison with other African countries. Using the average exchange rate of ¢8.9191 per dollar in 2022, they facilitated a clear understanding of these comparisons.
Before 2020, the BoG’s annual reports typically consolidated the emoluments of non-executive and executive directors, making it challenging to ascertain the specific amounts paid to non-executive directors.
However, the 2020 annual report disclosed that the board of directors received GH¢1.96 million in 2019. Since then, the emoluments of non-executive directors have steadily increased. By 2020, their fees and allowances had risen by GH¢670,000, and during the COVID-19 pandemic in 2021, these figures escalated from GH¢2.63 million to GH¢3.17 million.
By 2022, amid significant losses incurred by the bank, these emoluments surged to GH¢5.10 million. Concurrently, the BoG’s top management, including the Governor, his deputies, and senior executives, received GH¢16.79 million in short-term employee benefits. This marked a nearly quadruple increase from the GH¢4.49 million recorded in 2017.
During this period of rising fees and allowances, particularly in 2021, Finance Minister Ken Ofori-Atta urged Ghanaians to bear the burden and collaborate to revive the economy.
In April 2022, the government implemented a 30% salary reduction for all its top appointees as part of austerity measures to address the country’s financial challenges.
Additionally, stringent measures were imposed, including restrictions on foreign travel except for essential statutory purposes, a 50% decrease in expenditures related to meetings and conferences, and a halving of fuel coupon allocations.
“We have decided also to continue with the policy of a 30 % cut in the salaries of political office holders including the President, Vice President, Ministers, Deputy Ministers, MMDCEs, and SOE appointees in 2023,” he said.
During his October address on the state of the economy, President Nana Akufo-Addo reiterated this policy, stating, “We have also decided to maintain a 30% salary cut for political office holders, including the President, Vice President, Ministers, Deputy Ministers, MMDCEs, and SOE appointees in 2023.”
Members of the Council of State also voluntarily agreed to reduce their monthly allowances by 20% until the year’s end in response to the country’s economic challenges.
However, it seems that these austerity measures did not extend to the central bank.
The Bank of Ghana has faced intense scrutiny since revealing its significant financial loss. Since August 2023, the Minority in Parliament has demanded the resignation of Governor Dr. Ernest Addison and his two deputies, blaming them for what they call financial mismanagement.
“We are resolved to embark on popular action to occupy the Central Bank and drive out the team of inept, callous, and criminal mis-managers of the finances of this country and save the Bank of Ghana. The March to Ensure Accountability will begin in 21 days if the Governor of the Bank of Ghana does not do the needful and pack bag and baggage out of that sacred institution that he has so desecrated. Dr Ernest Addison Must Go! There has to be an end to impunity and it is now,” the Minority Leader, Dr Cassiel Ato Forson, said.
When the Governor and his deputies refused to resign, the Minority staged a demonstration. However, Dr. Addison reportedly informed Central Banking, an international business website, that he had no plans to resign. He characterized the Minority’s protests as “completely unnecessary.”
“The Minority in Parliament has numerous channels in civilized societies to voice their grievances, not through street demonstrations like hooligans,” Dr. Addison remarked.
Nevertheless, Bright Simons, Honorary Vice President of IMANI Africa, described the scale of the chaos caused by Ghana’s central bank managers as “the scope of the mess” created by the managers of Ghana’s apex bank as “eye-popping from a historical point of view.”
The Governor of the Bank of Ghana (BoG), Dr. Ernest Addison, has called on the government to take legal action against shareholders of banks and financial institutions implicated in the recent financial sector clean-up.
At a joint press conference held with the Ministry of Finance and the International Monetary Fund (IMF) on Monday, July 1, Dr. Addison emphasized the importance of holding individuals accountable for their roles in mismanagement and misconduct.
Expressing concern over the government’s slow response to these issues, Dr. Addison urged for more prompt and decisive measures to address the financial irregularities.
He stressed the need to recover funds that were misappropriated or mishandled during the clean-up exercise, highlighting the critical nature of ensuring justice and legal consequences for those responsible.
“It is taking a really long time to bring all of these matters to a close. However, it is important that the state needs to persevere and pursue these shareholders who have misappropriated depositors’ funds,” Dr. Addison stated.
He further pointed out that significant amounts of money claimed to have been used for the financial sector clean-up are currently held in assets by shareholders, and he called for the law to take its course in these matters.
From mid-2017 to the end of December 2018, the Bank of Ghana undertook a comprehensive banking sector clean-up, including recapitalization and various regulatory reforms.
These efforts aimed to enhance the safety, soundness, and stability of the financial system, thereby supporting economic growth.
Dr. Ernest Addison, the Governor of the Bank of Ghana (BoG), has announced that the Central Bank has amassed foreign exchange reserves amounting to $907 million as of June 27, 2024.
This revelation underscores the BoG’s efforts to bolster the country’s economic stability and strengthen its financial position amidst global economic fluctuations.
Foreign exchange reserves are crucial assets held by central banks in foreign currencies, including cash and other reserve assets like gold. These reserves play a pivotal role in managing a nation’s balance of payments, influencing the exchange rate of its currency, and instilling confidence in financial markets.
Dr. Addison disclosed this significant milestone during a joint press conference held between the Ministry of Finance and the International Monetary Fund (IMF) on Monday.
He emphasized that the BoG’s current foreign exchange reserves exceed the targets set under the IMF programme, reflecting robust management and strategic accumulation efforts.
Highlighting the strategic importance of these reserves, Dr. Addison affirmed the BoG’s commitment to collaborating closely with commercial banks to ensure their adequate capitalization.
This partnership aims to empower commercial banks to effectively fulfill their mandates in supporting economic growth and financial stability across Ghana.
Isaac Adongo, the Ranking Member of the Finance Committee of Parliament, has accused the Bank of Ghana (BoG) of falsifying figures related to the institution’s effectiveness.
According to him, the Central Bank is currently under-declaring the losses the institution had to incur in the previous year.
The Bank of Ghana has disclosed a significant financial loss of GH₵10.50 billion for the fiscal year ending 2023, marking a notable improvement from the GH₵60.9 billion loss reported in 2022. This financial setback is primarily attributed to a substantial rise in total interest expenses related to its open market operations, which surged by GH₵6.7 billion during the period under review.
According to the Bank’s 2023 Annual Report and Financial Statement, the increase in expenses was deemed necessary to manage the country’s excess liquidity and support the broader macroeconomic adjustment programme aimed at stabilizing inflation rates.
But Isaac Adongo believes a quadruple of the figure quoted by the Central Bank has been lost.
“I have reason to show to you that the Bank of Ghana is cooking the books. I held a press briefing in this room when I showed you that thee impairment of 48 billion last year, they wrote off 32 billion. They didn’t dispute it. So the impairment was 16 billion. In this report, in a note, you have stated that that impairment has increased from 16 billion to 53 billion. Is that not an impairment of 37 billion. And you write of impairment as expenditure. When you write off the expenditure, you will see that the Bank of Ghana made a loss of 47 billion, not 10 billion.”
He noted that he has received a copy of the Central Bank’s recent report after reaching out to the establishment.
Despite the incurred loss, the Bank of Ghana highlighted that its aggressive open market operations yielded positive results, contributing significantly to a notable slowdown in inflation to 23.2% by the end of 2023, down from a staggering 54.1% recorded at the close of 2022.
Total operating expenses for 2023 were reported at GH₵19.2 billion, showcasing a significant decrease from the GH₵66.9 billion recorded in the previous year. This reduction was attributed to lower impairment charges on loans and advances, as well as adjustments in the Bank’s holdings of Government of Ghana securities.
As of December 31, 2023, the Bank of Ghana and its subsidiaries reported total liabilities surpassing total assets by GH₵65.36 billion. The institution also clarified that no funds were allocated for reserve appropriation, given the reserve amount remained in deficit at the end of the financial year.
In addressing policy solvency concerns, the Bank assured stakeholders of its ability to generate sufficient realized income to cover the costs associated with its monetary policy operations. The Board of Directors and Management reaffirmed that the policy solvency outcome for 2023 aligns with the strategic objectives outlined in the previous fiscal year.
The third accused person in the ambulance case trial, Richard Jakpa, has provided testimony asserting that the letter from the first accused, Dr. Cassiel Ato Forson, concerning the establishment of Letters of Credit (LCs), was appropriately addressed to the Bank of Ghana (BoG) and not to the Controller and Accountant-General’s Department (CAGD).
Mr. Jakpa, the third accused, highlighted that the letter authorizing the establishment of LCs for the procurement of ambulances was addressed to the BoG and was issued on behalf of the then Finance Minister, Seth Terkper.
He argued that this detail is crucial for understanding the context and appropriateness of the authorization process.
Jakpa’s testimony served as a defense against allegations that Dr. Ato Forson acted improperly in the ambulance procurement process.
He emphasized that the procedure followed by Dr. Forson was consistent with standard governmental practices and that directing the letter to the BoG aligns with the usual protocols for such financial transactions. This, he argued, should mitigate claims of wrongdoing attributed to Dr. Ato Forson.
The controversy surrounding the procurement of the ambulances has seen Dr. Ato Forson accused of financial malfeasance, with prosecutors alleging that he bypassed established procedures.
However, Jakpa countered this by stating that addressing the letter to the BoG was not only appropriate but also necessary for the timely and efficient execution of the procurement.
Jakpa explained that the BoG is the correct entity for handling such transactions, as it oversees the country’s monetary policy and financial operations.
He detailed how the BoG, rather than the CAGD, is typically responsible for issuing LCs due to its role in managing the nation’s foreign exchange and international financial transactions.
This distinction, he noted, is critical in ensuring that financial processes adhere to proper channels, reinforcing that Dr. Ato Forson’s actions were in line with standard practices.
However, the prosecution argued that the seal on the document indicates the authority of the former Deputy Minister, not the Minister. This contention remains a focal point in the case as the trial continues to unfold.
The Supreme Court, in a unanimous decision, overturned the Court of Appeal’s ruling and upheld the High Court’s decision in the case involving The Republic versus the Bank of Ghana (BoG), Ex Parte Hoda Holdings Limited.
In its ruling, the Supreme Court affirmed that the Bank of Ghana was justified in revoking the license of UniCredit Ghana Limited.
Chief Justice Araba Esaaba Sackey Torkornoo presided over the five-member panel, which also included Justices Mariama Owusu, Prof. Henrietta Joy Abena Nyarko Mensa-Bonsu, Ernest Yao Gaewu, and Yaw Darko Asare. The ruling was issued on June 26, 2024.
Background
On August 16, 2019, the Bank of Ghana declared UniCredit Ghana (UniCredit) bankrupt and annulled its license to operate as a savings and loans company.
The Bank of Ghana justified its actions under section 123 of the Banks and Specialised Deposit Taking Institutions Act of 2016 (Act 930).
Following this decision, HODA Holdings Limited, the majority shareholder of UniCredit, filed an application at the Human Rights Division of the High Court. Their application sought judicial review of the Bank of Ghana’s decision to annul UniCredit’s license and requested an injunction to prevent the Bank from interfering with UniCredit’s operations.
High Court Ruling on the Case
On March 18, 2021, Justice Gifty Agyei Addo’s High Court ruling favored the Bank of Ghana, affirming that UniCredit was financially distressed before its license was terminated.
The court also determined that contrary to UniCredit’s assertion of being denied a hearing, the Bank of Ghana had issued numerous notices to UniCredit.
“Directing it to rectify its capital deficiency failing which the Bank of Ghana would exercise its powers under s.123 of Act 930.”
The Court also affirmed that the Bank of Ghana acted correctly in revoking UniCredit’s license.
It upheld that the Bank of Ghana’s actions to revoke UniCredit’s license and place it under receivership were in accordance with Act 930.
Appeal of the case by HODA Holdings
Hoda Holdings Ltd lodged an appeal with the Court of Appeal in response to the High Court’s decision.
On July 7, 2022, the Court of Appeal, composed of Justice Janapare A. Bartels-Kodwo, Justice Merley Wood, and Justice G.S. Suurbaareh, overturned the High Court’s ruling and sided with Hoda Holdings Ltd.
The Court of Appeal determined that the Bank of Ghana’s revocation of UniCredit’s license under section 123 of Act 930 should have adhered to the procedures outlined in section 16(3&4) of the same Act. It also found that the Bank of Ghana’s failure to comply with these procedures meant that UniCredit was not afforded a hearing before its license was revoked.
BoG’s Appeal to the Supreme Court
The Bank of Ghana, which had some concerns with the decision of the Court of Appeal, also filed an appeal at the Supreme Court against the decision of the Court of Appeal. This has resulted in the new ruling by the highest court of the land on this particular case.
The Bank of Ghana (BoG) has raised the maximum advance payment for the importation of goods and services to $200,000.
This change is part of the Central Bank’s amendment to the rules governing advance payments for imports.
The new limit, a 300% increase from the previous $50,000 cap, will take effect on Monday, July 1, 2024.
Under the revised regulations, importers using the advance payment option can now make a maximum payment of $200,000 per transaction.
The Bank of Ghana stated in a notice, “With effect from 1st July 2024, the maximum amount permitted using the Advance Payment option for imports has been increased from US$50,000.00 to US$200,000.00 per transaction, per importer.”
Advance payment is a method in international trade where the buyer places funds at the seller’s disposal before the shipment of goods or services.
These payments are processed within 24 hours of receiving the customer’s request.
In addition, documents required for the amendment are as follows:
A Customer instruction or request.
A valid Import Declaration Form (IDF).
A Pro forma or Commercial Invoice outlining the details of the transaction.
An Undertaking by the importer to submit clearing documents within a period not exceeding: (i) 90 days from payment of invoice for general merchandise or finished goods. (ii) For capital goods such as plant, machinery and equipment with long manufacture periods, the period shall be 180 days which can be extended with prior approval from the Head, Financial Markets Department, Bank of Ghana.
A Sales Contract or Supplier Agreement detailing payment terms and schedules. (Optional)
Executive Director of Revenue Mobilisation Africa, Geoffrey Kabutey Ocansey, expressed the view that the Bank of Ghana might require recapitalization similar to the collapsed banks due to mismanagement of affairs.
The economist contended that the central bank has recently exhibited poor management, resulting in losses over the past couple of years.
For the financial year ending in 2023, the BoG reported a loss of GH¢10.5 billion.
This loss was attributed to a significant increase in total interest expenses on open market operations by the Central Bank, amounting to GH¢6.7 billion during the review period.
The Bank clarified that the rise in expenses was essential to manage the economy’s excess liquidity and to support the disinflation process as part of a broader macroeconomic adjustment program.
As of December 31, 2023, the Bank of Ghana and its subsidiaries had total liabilities exceeding total assets by GH¢65.36 billion.
Total operating expenses for 2023 amounted to GH¢19.2 billion, representing a significant decrease from the GH¢66.9 billion recorded in 2022.
In August of the preceding year, the BoG defended its new $250 million headquarters.
In response, Geoffrey Kabutey Ocansey highlighted that the circumstances leading to the central bank supervising the collapse of several financial institutions mirror those currently affecting them.
During an interview on Frontline on Rainbow Radio 87.5FM, he stated that one of the primary reasons for the BoG’s intervention in collapsing the banks was poor governance and a breach of sector guidelines.
He cautioned that failure to address these losses could have adverse effects on the economy, potentially impacting monetary policy and endangering the central bank’s independence and reputation.
“If care is not taken, the Bank of Ghana would have to be recapitalized based on the same reasons it used in collapsing the banks. The Bank of Ghana advised the government to collapse banks and other financial institutions. But when you evaluate the work of the BoG currently, you will discover that they are worse than the banks that collapsed. The bank would have to be recapitalized based on the same principles it used in the collapse of the other banks,” he told host Kwabena Agyapong.
He pointed out that as the bank couldn’t finance the government’s budget or provide loans to it, the government has turned to other banks, leading to a rise in Treasury rates and heightened interest in loans for small and medium-sized enterprises (SMEs).
