The Governor of the Bank of Ghana, Dr Ernest Addison, has justified the quest to recapitalize the central bank.
He said this will bolster their credibility in undertaking reforms planned under a memorandum of understanding his outfit will sign with the Ministry of Finance.
Dr Addison said this at a joint press conference by the Ministry of Finance, International Monetary Fund and the Bank of Ghana in Accra on July 1, 2024.
“Steadfastness and commitment will be needed from now to the end of the year to see through all the structural reforms envisaged under the programme, including the signing of Memorandum of Understanding (MoU) between the Ministry of Finance and the Bank of Ghana on the recapitalization of the central bank. This will strengthen the central bank’s credibility to effectively deliver on its reforms,” he explained.
In June, 2024, the central bank announced plans to sign the MoU following its significant losses for two consecutive years.
The MoU is a strategic move to help restore the financial health of the central bank and drive its positive equity position after it posted a GHS 10.5 billion loss in 2023 due to high expenditure related to monetary interventions and a GHS 60.9 billion loss in 2022 over impairments during the domestic debt exchange programme.
The Ministry of Finance and the Bank of Ghana will sign the MoU to ensure that the Central Bank can continue with its mandate of managing monetary policy and ensuring price stability.
The recapitalization plan will look at the capital required, the timeline for recapitalization and more importantly, the sources of funding.
