Former Deputy Minister of Finance and Member of Parliament for Atiwa East, Abena Osei-Asare, has defended the Bank of Ghana’s (BoG) performance under the previous administration, explaining that the central bank’s recent financial losses were a result of deliberate policy actions taken to protect the nation’s economy during a period of economic instability.

Speaking on Joy FM’s Super Morning Show today, June 9, Mrs Osei-Asare emphasised that the challenges faced by BoG should be viewed within the broader global economic instability triggered by the COVID-19 pandemic.

“We all live under the same globe and witnessed what happened from the onset of COVID-19,” she stated. “It wasn’t only the Bank of Ghana that faced crises; the Bank of England and many European banks also went through significant challenges.”

She recalled that in 2022, the government embarked on a “painful but necessary” domestic debt exchange to restore debt sustainability.

“If you recall, the government assured that those of us who had money with banks or with the government through the BoG would not receive any haircut on the principal. Our principals remained intact, but the BoG took a substantial hit, close to 60%, on its principal. The BoG absorbed that loss on behalf of all of us,” she explained.

Highlighting the financial situation of the BoG, she said, “This is clearly an improvement. Yes, there was a loss of about 9 billion Ghana cedis, but we must also recognise that there was growth in equity of roughly 4 billion cedis. The loss was not solely due to the Gold-for-Oil programme; several factors contributed. BoG’s open market operations alone resulted in approximately 8 billion cedis in losses. However, these operations were necessary to stabilise the market and control inflation, so they came at a cost.”

She clarified the nature of the losses, stating, “If these losses were due to the general operations of the BoG—something personal or mismanaged—then that would be alarming. But the majority of the losses were related to open market operations, which accounted for about 8 billion cedis. This was done to stabilise the economy and reduce inflation.”

Mrs Osei-Asare further elaborated that in supporting the economy, BoG first took the hit through the haircut on bonds.

Then, to bring down inflation, it had to undertake further market operations, which also resulted in losses.

"Additionally, the Gold-for-Oil programme involves foreign exchange transactions, not in our own currency, so fluctuations can cause either exchange rate gains or losses," she said.

There have been times when BoG recorded exchange rate gains, and other times when losses occurred.

She emphasised the positive outlook, saying, “Most importantly, there has been a growth of about 4 billion cedis in BoG’s equity. This indicates they are on a path to recovery. Since 2022, progress has been made; it will take time, but the signs are positive. We should sustain and build on this progress to achieve a full turnaround.”

Recalling government support during the banking sector clean-up, Mrs Osei Asare noted, “During the efforts to improve the asset quality of banks, BoG acted as regulator, and the government had to provide 21 billion cedis to support BoG. It was a give-and-take process, and together, we worked to achieve the common good: sustaining the economy and promoting growth.”

Stressing national unity, she said, “It’s not about the Ministry of Finance or the Bank of Ghana alone. As a country, when we faced the crisis, we worked together. Some agencies took losses or setbacks, but it was for the larger national interest—to sustain the economy and foster growth.”

“Now, we are seeing the fruits of our efforts. In 2024, while many countries, including those in the West, experienced a slowdown in growth, Ghana’s economy exceeded its target of 5.7%. This shows that working together for the common good is yielding the results we desire. That is how we want to continue moving forward,” Mrs Osei-Asare added.