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0 A Banking Consultant, Dr Richmond Atuahene, has attributed the GHS10.5 billion loss of the Bank of Ghana in 2023 to the effect of the Domestic Dept Exchange Programme (DDEP).
He stated that the DDEP destroyed the government bonds and cocoa bills that were being held.
“To a larger effect, it is the rippling effect of the DDEP. Once upon a time, we held government bonds and cocoa bills, unfortunately, all these were basically destroyed.
“So today when you go to the open market operations or repurchasing or rediscounting they have no paper or documents to use to back the transaction so they were performing it from a negative point of view by so doing your interest expense will go up and your income will go down so it stems from the DDEP and its spill over is what the Governor said,” Dr Atuahene said on the Ghana Tonight show on TV3 Monday June 3.
The Bank and the group reported a loss of GH¢10.50 billion for the year 2023, as against the GH¢60.86 billion loss in 2022.
BoG’s GHS10.5bn loss in 2023 was in line with experiences of central banks globally – Addison
As of 31 December 2023, the total liabilities of Bank of Ghana and its subsidiaries exceeded its total assets by GH¢65.36 billion also as a gaint GH¢54.52 billion deficit recorded in 2022.
In 2023, total operating income of the Bank and the Group increased by 47.3 per cent to GH¢8.80 billion, the Bank of Ghana‘s 2023 Annual Report and Financial Statement disclosed.
This increase in operating income was driven to a large extent by interest earned on the Bank’s investments in securities and bonds held abroad, fines imposed on institutions for regulatory breaches, and fees and charges.
Total operating expenses of GH¢19.2 billion reported for 2023 shows a decline when compared with the GH¢66.9 billion recorded in 2022.
This was due to impairment charges on Loans and Advances and Bank of Ghana’s holding of Government of Ghana securities. In 2022, these two-line items accounted for GH¢54.5 billion in expense charges on account of the Domestic Debt Exchange Programme.
The combination of an increase in total income and reduction in operating expenses led to a total loss position of GH¢10.6 billion, representing an improvement when compared with the loss of GH¢60.9 billion recorded in 2022.
The loss position was driven largely by an increase in total interest expense incurred on Open Market Operations by GH¢ 6.7 billion.
The total cost of Open Market Operations (an activity by a central bank to exchange liquidity in its currency with a bank or a group of banks) in 2022 which stood at GH¢1.7 billion, increased to GH¢8.4 billion in 2023.
The increase in costs associated with open market operations for 2023 was driven in large part by the need to mop up excess liquidity in the economy in 2023 and to support the dis-inflation process envisaged in the overall macroeconomic adjustment program.
This Open Market Operations activity, which accounted for a significant portion of the loss incurred yielded positive results.
The aggressive mopping up operations, contributed in slowing down inflation to 23.2 per cent by the end of 2023, significantly down from the rate of 54.1 per cent at the end of 2022.
The post Bank of Ghana’s GHS10.5bn loss in 2023 was a spillover from the DDEP – Dr Atuahene first appeared on 3News.
