It is emerging that the central government has backtracked on its earlier stance of not committing any state funds to recapitalize the Bank of Ghana (BoG), as the Governor has revealed a new commitment of the state.
The governor of the BoG, Dr. Johnson Asiama, says the government has committed to recapitalising the Bank of Ghana, offering a major boost to the institution after years of heavy losses.
Speaking at the end of the first Monetary Policy Committee meeting press conference, Dr. Johnson Asiama, in addressing the public concerns about the Bank’s weakened balance sheet, reminded Ghanaians that the central bank is not a profit-making entity and was never designed to be one.
He emphasized that their mandate is price stability and financial stability, stressing that delivering on that mandate inevitably comes with costs.
These costs include expensive monetary policy operations, revaluation losses from currency movements, and gold-related expenses. While such figures can look worrying in financial statements, Dr. Asiama described them as legitimate costs incurred in the public interest, not signs of mismanagement.
“The Bank of Ghana is not a profit-making institution. Our mandate is to ensure price stability. Our mandate is to ensure financial stability. Now, in carrying out this mandate, yes, you will incur costs,” he explained.
He continued, “But then that cost has to be put in proper perspective. And so you will see in our accounts when it is published that, for example, the cost of monetary policy operations is quite high. And then you also have things like revaluation costs. They are also there. And not to talk about our good friend, the gold-related expenses. These are legitimate costs that you incur for the public good.”
He was happy to announce the government’s fresh commitment to help shoulder those costs. Dr. Asiamah explained that under recent amendments to the Bank of Ghana Act, a new provision now allows the government to recapitalise the central bank from time to time.
According to the Governor, discussions are already ongoing with the Minister of Finance, and the government has given clear assurance that it will step in to strengthen the Bank’s balance sheet.
This development marks a clear shift in the position of the government. Early last year, the Finance Minister had firmly stated that state funds would not be used to repair the Bank of Ghana’s balance sheet, a stance that resonated strongly with a public already weary of fiscal pressures.
The latest commitment, as announced by the governor, therefore, represents a notable U-turn, driven by the need to protect the credibility and effectiveness of the central bank.
“You would have heard that when we amended the Bank of Ghana Act recently, there’s a provision in there for governments to recapitalise the Bank of Ghana from time to time. And so the government is committed to recapitalising us, or more or less, to strengthen our balance sheet going forward. And so rest assured, we will ensure that we remain policy solvent,” he added.
As the experts explain, a financially weak central bank can struggle to enforce policy decisions that keep inflation in check and maintain stability in the financial system. Recapitalisation, in this sense, is not only about bailing out the BoG, but also an investment in economic stability.
Dr. Asiama was quick to note that the Bank remains policy solvent and fully committed to its mandate. With government support now formally embedded in law, he expressed confidence that the central bank will continue to serve the public good, even when that comes at a cost.
