A financial analyst, Dr Michael Dawson, has commended the government for its decision to recapitalise the Bank of Ghana (BoG), stating, that is the way to go since the Central Bank saved the economy from troubles.

He also debunked the assertion that the BoG management has been reckless in the management of the Central Bank.

Dr Dawson was reacting to a tweet by the Minority Leader, Cassiel Ato Forson who sought to create the impression that the Central Bank had been mismanaged, thus leading to its recapitalisation.

To him, the Bank of Ghana took the major hit due to the Domestic Debt Exchange Programme and therefore it is right for the government to recapitalise it.

“Bank of Ghana took the major hit due to the DDEP [Domestic Debt Exchange Programme] and therefore it is right for the government to recapitalise it. We are all aware that the Bank of Ghana stepped in as a loss absorber during the DDEP, absorbing substantial impairment losses to ensure that the country’s qualifies for the IMF [International Monetary Fund] programme”.

He explained, “BoG should be commended for the bold decision to ensure that the country secures the IMF programme. With a 50% haircut, it was clear that the Bank’s balance sheet would be affected”.

According to him, the situation would have been worse and chaotic if the Central Bank had refused the haircut.

Dr Dawson further said the government resources being used to recapitalse the National Investment Bank (NIB) should be channeled to the recapitalisation of the Bank of Ghana, adding “The recapitalisation is good to ensure that the Cenral Bank is strengthened and deliver on its mandate.

“We are witnesses to the work of the current management of the Bank of Ghana led by Dr Ernest Addison. I think we should celebrate the Governor Addison led management for the way they have managed the financial sector. If you look at the decisions that they took during the crisis and pandemic years, they have really helped the economy”.

“It is important to state that the IMF, BoG and MoF [Ministry of Finance] all acknowledged the impact of DDEP on the Bank of Ghana’s balance sheet. It is irresponsible to say that it is due to recklessness. The government will only recapitalize up to the portion attributed to the DDEP. Other losses will correct themselves with the economic cycle” Dr Dawson pointed out.

He continued that “As an economist, l have read the measures outlined by the Central Bank in its 2023 Annual Report and Financial Statement and l believe that these measures will help to restore capital”

He also advised politicians to be measured in their commentaries on the Central Bank, saying, it is a very credible institution and a major player in Ghana’s economic development.