Dr Patrick Asuming, an economist with the University of Ghana Business School (UGBS), has said making profits should not be a core mandate of the Bank of Ghana (BoG).
Asuming’s comment is in reaction to the central bank’s losses totaling GHC60.81 billion for the 2022 financial year. This compares to a profit of GHC1.23 billion recorded in the 2021 financial year.
The losses were as a result of the government’s domestic debt restructuring activities, the depreciation of the cedi among others.
The BoG’s audited financial statement for 2022, which was released on Friday (28 July) indicated that as at 31 December 2022, the total liabilities of the central bank and its subsidiaries exceeded its total assets by GHC54.52 billion.
Reacting to the development on Accra-based TV3 on Tuesday (1 August), Asuming said the bank’s core mandate of maintaining a sound financial system is of priority than making profit.
Core mandate
“I think we have to understand why we set up the Bank of Ghana,” Asuming said. “It is the regulator to ensure that the financial system is sound, manages monetary policy to stabilise prices and boost economic activities and ensure the financial system is sound.”
“Ordinarily, we don’t set up the central bank to make profit or losses,” he said, adding that: “So, when it comes to how we measure the performance of the bank, whether they are making profits or making losses is really not the goal…”
“For many years, the central bank makes profit and we don’t make much noise about it, because that is not the reason why they are there,” Asuming said.
Listen to Dr Patrick Asuming in the attached audio clip below:
Premature
Appearing on the same network, the director of research at the Bank of Ghana Dr Philip Abradu-Otoo described calls for the resignation of the Governor over the development as premature.
He said the bank will work to ensure financial stability in the economy despite the loss.
“No, I don’t think we are there yet. If you look at the reasons that are ascribed, there were internal and external factors and especially the impact of the domestic debt exchange.
“For the direct impact, yes we have recorded a loss, but we will continue to discharge our mandate. This is not going to impair our ability to continue to fight inflation. So, we will continue on the path of having stable inflation and ensuring financial stability in the economy,” Abradu-Otoo said.
Listen to Dr Philip Abradu-Otoo in the attached audio clip below:
Reporting by Fred Dzakpata in Accra
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