Bank of Ghana (BoG) is facing a monumental crisis after declaring bankruptcy with a staggering GH₵53 billion debt on its hands. This dire situation comes on the heels of the central bank’s decision to collapse 16 banks, including five indigenous banks, as part of a sector clean-up initiative.
The once esteemed BoG now finds itself in financial turmoil, seeking salvation from the new Mahama administration. The massive debt is a legacy of the previous Dr. Ernest Addison administration, which ignored warnings and incurred hefty expenditures without proper oversight.
The current governor, Dr. Johnson Asiama, has turned to the government for a bailout, mirroring the actions of the previous administration that sought assistance from the International Monetary Fund (IMF). However, the government has rebuffed BoG’s plea for financial support.
Finance Minister Dr. Cassiel Ato Baah Forson revealed the extent of BoG’s financial woes during a recent budget presentation in Parliament. He emphasized that the taxpayer cannot bear the burden of a GH₵53 billion bailout and urged the central bank to explore internal solutions.
Dr. Forson suggested that BoG consider selling or leasing back its assets, including the newly constructed headquarters, to raise funds internally. He emphasized the need for accountability and fiscal responsibility within the central bank and criticized past decisions that led to the current debt crisis.
Banking consultant Richmond Atuahene echoed calls for accountability, urging those responsible for the financial mismanagement to answer for their actions before Parliament. He emphasized the importance of internal restructuring, cost-cutting measures, and asset sales to alleviate BoG’s financial strain.
As concerns mount over BoG’s financial stability and international credibility, stakeholders are pushing for swift action to address the debt crisis. The central bank’s survival is paramount, but remedial measures must be taken promptly to ensure its long-term viability.
In the wake of a tumultuous banking sector clean-up that backfired on BoG itself, the central bank now faces a critical juncture where decisive actions and prudent financial management are imperative for its survival and the stability of Ghana’s financial system.