Alhassan Sayibu Suhuyini is questioning why the Bank of Ghana (BoG) collapsed several banks for nonperformance and turns out to be posting losses few years down the lane.
The Tamale North Member of Parliament says the BoG’s reason for restructuring the banking sector with its financial sector cleanup, although opposed by the opposition as the wrong means, was rejected by the government who ended up collapsing many businesses and rendering people unemployed.
Mr. Suhuyini has attributed the bank’s losses as a reflection of the “decay” the New Patriotic Party (NPP) government has subjected the entire nation into.
His comments come on the back of losses posted by the Bank of Ghana for the past two years.
On the KeyPoints on TV3 Saturday, June 08, 2024, Mr. Suhuyini bemoaned how the government ignored the opposition’s advice to put the nation in a mess.
“What is happening is a reflection of the decay we have to endure as a people since this government started. Is it not an irony that you have a government that collapsed commercial banks in the name of restructuring the financial sector, even when we in the opposition told them they were doing it the wrong way, they insisted that their approach was going to strengthen banking in this country and in the end, they did not only render people unemployed but left us with huge debts,” the MP lamented.
“The regulator, the Bank of Ghana is now seeking recapitalisation and a bank which used to post profit for regulating the sector is now posting losses,” he added.
He also criticised the BoG for prioritising the construction of a headquarters whilst it is running losses as a regulator.
“For me what is even more shocking is the fact that the bank in this state seems to be prioritising a reckless construction of a headquarters. In the state that the Bank of Ghana is in today, why is the construction of a headquarters a priority? What is the threat to that building that they operate from today? They have operated there since God knows when and they have never reported any attacks or any threats. Why all of a sudden has it become so important… and go and look at the speed at which the construction is going,” he stated.
The Bank of Ghana (BoG) announced a GH₵10.50 billion loss for the financial year ending 2023, attributing it to an increase in total interest expenses on its open market operations.
During the period under review, these expenses surged by GH₵6.7 billion.
The BoG, had, in the previous year, 2022, incurred a whooping GH₵60.9 loss due to the impairment of its holdings of government stocks and non-marketable instruments during the domestic debt exchange program.
Aside from supporting the disinflation process as part of the broader macroeconomic adjustment programme, the BoG says the rise in expenses was necessary to manage the economy’s excess liquidity.
As of December 31, 2023, the central bank and its subsidiaries had total liabilities surpassing total assets by GH₵65.36 billion.
The total operating expenses for 2023 were GH₵19.2 billion, a significant decrease from the GH₵66.9 billion recorded in 2022.
This reduction is attributed to lower impairment charges on loans and advances and the Bank’s holdings of Government of Ghana securities.
“This Open Market Operations activity, which accounted for a major portion of the loss incurred, yielded positive results,” the Bank of Ghana further explained.
The Bank of Ghana’s 2023 Annual Report and Financial Statement revealed that “the aggressive mopping up operations, contributed to slowing down inflation to 23.2 per cent by the end of 2023, significantly down from the rate of 54.1 per cent at the end of 2022.”
The BoG also says in its report that no funds were allocated for reserve appropriation, as the reserve amount was in deficit as of December 31, 2023.
The Central Bank promptly added a note on policy solvency, emphasizing its ability to generate sufficient realized income to cover the costs associated with conducting monetary policy operations.
In the opinion of the Board of Directors and Management, the policy solvency outcome for 2023 is consistent with the perspective held in 2022.
Suhuyini describes incessant surge in budget for BoG headquarters as a ‘gig’
