The former president of Ghana, John Mahama, has criticised the Bank of Ghana (BoG) Governor, Dr Ernest Addison for his “incompetence” in the wake of the GH60.8 billion loss declared by the central bank.
According to him, Dr. Ernest Addison is trying to cover up his poor management with the Domestic Debt Exchange Programme (DDEP).
Mr. Mahama tweeted on Thursday, August 10, that the Governor of the Central Bank was following in the footsteps of the Minister of Finance. “An incompetent Finance Minister damages the economy and uses COVID-19 and the Ukraine-Russia war as cover-ups. A pliant Governor destroys the Central Bank and seeks to use the Domestic Debt Exchange (DDE) as a cover,” he tweeted.
The Bank of Ghana has come under fire from Ghana’s minority caucus for reporting a drop in revenue as a result of the Domestic Debt Exchange Programme (DDEP). Many experts, including the minority of MPs, have expressed their shock at the discovery made in the central bank’s financial report for the year ending 2022.
According to Isaac Adongo, a ranking member of parliament’s finance committee, the central bank can’t conduct monetary policy without creating money. After the 2023 mid-year budget was presented on July 31, a member of the minority, Isaac Adongo declared the Bank of Ghana broke.
The Bank of Ghana, meanwhile (BoG) says that GH53.1 billion is to blame for the total loss of GH60 billion that happened because of the government’s Domestic Debt Exchange Programme (DDEP). Since the domestic auction was failing, the Bank reportedly intervened to prevent a major economic and social disaster.
BoG says that a further drop in Ghana’s sovereign debt rating, which made it impossible for Ghana to borrow money from foreign capital markets, caused a liquidity crisis that turned into a balance of payments crisis.
It went on to say that, as a result of the failed auctions, “the Bank of Ghana lost US$500 million in reserves and built a significant overdraft with the government in just two months.”
“It became clear that Ghana was on a path that was unsustainable, and the Government had to approach the IMF for support in July 2022. The IMF process included putting into place a credible programme of reform, which included restructuring the total government debt to sustainable levels. Until the Staff Level Agreement with the IMF was reached in December 2022, the Bank of Ghana had to continue to provide the necessary support to keep the economy running.”
The Bank of Ghana “informed the Minister of the developments in its finances in accordance with the provisions of the Bank of Ghana Act (Act 612), as amended,” according to the statement.
Mr. Mahama, however, claims that this justification is baseless.
