Despite the current financial struggles of the Bank of Ghana (BoG), the governor, Dr. Johnson Asiama, has emphatically stated that its autonomy and operational viability remain fully intact.
Dr. Asiama admitted that the current balance sheet of the BoG is impaired due to the impact of the country’s recent domestic debt restructuring exercise, which stemmed from the 2022 economic crisis.
The governor of the BoG, who was speaking on the Governor Talks Series during the ongoing World Bank/IMF Annual Meetings in the United States, stressed that the situation has not in any way compromised its ability to function or its autonomy from government influence.
The Bank reported an operational loss of GHC13.23 billion in 2023. The loss, however, improved in 2024, and the bank reported a minimized loss of GHC9.49 billion.
The governor says, despite this huge impairment, which makes it technically insolvent, it is still policy solvent. This means their capacity to carry out market operations, such as their monetary policy operations, has not been affected.
“The domestic debt issue has impacted, to a large extent, on our balance sheet. The central bank itself is policy solvent, but then, technically, you can say we are almost insolvent. The challenge is to be able to correct and to repair our balance sheet within a short time, but we are looking at it as a medium-term problem. And that said, operationally, we are able to function,” he clarified.
Dr. Asiama was also quick to dismiss suggestions that this had led to government control over the Bank’s decisions. He explained that there is no form of central government interference, and hence the BoG has the free hand to operate irrespective of its weakened finances.
“I must say that even at current levels, we have our independence. We, in no way are we controlled by the government. We are not constrained in any way at all,” he insisted.
He further disclosed that the Bank is undertaking major legislative reforms aimed at reinforcing its independence and preventing future fiscal pressures from undermining its operations. He said one key focus of the amendment is to clearly define what qualifies as an “emergency,” after realizing that the lack of clarity in previous laws allowed excessive central bank financing in 2022.
He said, “A number of reforms that we are making to the Central Bank Act, which should permit us to be able to hold that anchor going forward. We need to define, for example, what constitutes an emergency because we saw that those, you know, subjective issues probably allowed the play out of what happened in 2022. So yes, the legislation will help to strengthen our independence going forward.”
The Governor acknowledged the current challenge of rebuilding the Bank’s financial position but said the repair process will be managed gradually over the medium term. However, until then, the Bank of Ghana continues to operate independently, setting monetary policy, managing inflation, and overseeing financial stability without political interference.
