Finance Minister Dr. Cassiel Ato Forson has made it clear that the government won’t be using taxpayer funds to bail out the Bank of Ghana (BoG) to the tune of ¢53 billion.
This decision comes after the central bank’s request for a bailout due to its negative equity challenge under the previous Ernest Addison-led administration.
Dr. Forson emphasized that the BoG’s financial struggles are a result of its own actions, having generated significant debt and deficits, leading to an unhealthy balance sheet and negative equity.
“On the back of the report that showed the ¢60 billion hole, remember, in my previous life as the Minority Leader, I kept saying that the Bank of Ghana had generated so much debt, so much deficit. As a result, their balance sheet is not healthy, and they have generated negative equity,” he said in an interview.
Instead of relying on public funds, the minister urged the BoG to find internal solutions to address its financial woes.
“Apparently, the previous administration in the Bank of Ghana had signed an MoU for the Government of Ghana, or the taxpayer, to recapitalise the central bank with ¢53 billion. I’ve asked the Bank of Ghana to look within, cut expenditure, because the taxpayer cannot afford ¢53 billion,” he said.
Some potential cost-cutting measures Dr. Forson suggested include selling off non-essential assets, such as hotels and guest houses, and reducing expenditure on events and other areas.
He also pointed out that the BoG’s new Head Office, a large building, could be sold and leased back to generate revenue.
Dr. Forson warned that allocating ¢53 billion to bail out the BoG would mean depriving citizens of essential public services like roads, schools, and hospitals. He emphasized that the taxpayer cannot afford to foot the bill for the central bank’s financial mismanagement.
“Giving ¢53 billion to the central bank will simply mean that we will have to deny the taxpayer some public good, like roads, like schools, like hospitals. Is that what we want? Can we afford it? At this stage, the answer is no. We cannot afford that. And so the central bank must look within,” he asserted.
While ruling out an immediate government bailout, Dr. Forson left the door open for a long-term solution, suggesting that the BoG could consider winding back its profits over the next 10 years to recapitalize. However, any potential solution must be initiated by the BoG itself, rather than relying on the government to bail them out.
“If the central bank is able to come to me with a reasonable offer, we can have a conversation. But it must start from them,” he noted.
“I have also said that they may have to consider winding back their profit over the next 10 years to recapitalise. That can also be an option,” he concluded.
Baina Multimedia/ Khadijahtu Kubura Kailani
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