In its 2023 Annual Report, the Bank of Ghana reveals a significant deficit, with total liabilities surpassing assets by GH₵65.36 billion, representing an increase from the previous year’s GH₵54.52 billion deficit.
Despite this concerning shortfall, the Bank managed to navigate through operational complexities, demonstrating resilience and adaptability in its financial management.
The Bank’s total operating income witnessed a notable surge, soaring by 47.3% to reach GH₵8.80 billion in 2023. This remarkable increase was primarily attributed to several contributing factors, including interest earned on investments in securities and bonds held abroad, fines imposed on institutions for regulatory breaches, and various fees and charges.
The Bank’s total operating expenses of GH¢19.2 billion reported for 2023 show a decline when compared with the GH¢66.9 billion recorded in 2022. This was due to impairment charges on Loans and Advances and the Bank of Ghana’s holding of GoG securities.
In 2022, these two line items accounted for GH¢54.5 billion in expense charges on account of the Domestic Debt Exchange Programme.
Despite the reduction in operating expenses, the Bank still reported a total loss position of GH₵10.6 billion for 2023. While this loss represents an improvement from the GH₵60.9 billion loss recorded in 2022, it underscores the ongoing challenges faced by the institution.
A significant contributing factor to this loss was the substantial increase in total interest expense incurred on Open Market Operations, which surged by GH₵6.7 billion. The cost of Open Market Operations escalated from GH₵1.7 billion in 2022 to GH₵8.4 billion in 2023, reflecting the Bank’s efforts to manage excess liquidity in the economy and support the disinflation process as part of its broader macroeconomic adjustment programme.
However, despite the incurred losses, the Bank of Ghana maintains its policy solvency, a critical indicator of its financial health. The income generated in 2023, totaling GH₵8.8 billion, was sufficient to cover the costs associated with conducting monetary operations, which amounted to GH₵8.4 billion.
This positive policy solvency factor of GH₵0.4 billion reaffirms the Bank’s ability to navigate financial challenges while fulfilling its monetary policy mandates effectively.
While the institution grapples with a significant deficit and operational losses, its strategic management of income and expenses underscores resilience and a commitment to maintaining policy solvency amidst evolving economic conditions.
Norvanreports