Ghana: Bank of Ghana Set for Early Recapitalization, MoU with Finance Ministry Pending – Dr. Addison

Bank of Ghana Set for Early Recapitalization, MoU with Finance Ministry Pending – Dr. Addison
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Dr. Ernest Addison, Governor of the Bank of Ghana, has announced forthcoming plans for the early recapitalization of the central bank following comprehensive discussions with the recently concluded IMF Mission to Ghana. These discussions centered on the repercussions of the Domestic Debt Exchange Programme (DDEP) and the subsequent losses reflected in the central bank’s financials.

The Bank of Ghana’s annual report for 2022 disclosed significant financial setbacks, with a reported loss of GH¢60.8 billion and a shift from a positive equity of GH¢5.7 billion in the previous year to a negative equity of GH¢55.12 billion. The central bank has attributed these losses primarily to the government’s implementation of the DDEP, which has markedly affected its financial stability.

To mitigate these challenges, Dr. Addison revealed that an agreement has been reached for the early recapitalization of the Bank of Ghana, with a Memorandum of Understanding (MoU) expected to be signed soon with the Ministry of Finance.

He stated, “During the discussions with the IMF Mission, we tackled critical issues, including the DDEP’s impact on our balance sheet. We have now reached a broad agreement on the need for early recapitalization, and a MoU with the Ministry of Finance will be formalized to facilitate this process.”

This announcement was made during a joint press conference held in Accra on April 13, 2024, involving representatives from the IMF, the Ministry of Finance, and the Bank of Ghana. This press event also marked the achievement of a staff-level agreement with the IMF concerning the second review of Ghana’s 17th bailout program.

Additionally, Dr. Addison mentioned that discussions on the government’s external debt restructuring program are advancing, with ongoing negotiations involving commercial creditors, bondholders, and bilateral creditors.

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