BoG’s 2023 annual report publication commendable – IFRIG wants more action on losses

The publication 2023 Annual Report and Financial Statement of the Bank of Ghana (BoG) has attracted commendation from the Islamic Finance Research Institute of Ghana (IFRIG).

Dr. Shaibu Ali, Director of IFRIG stressed that the importance of the publication of such reports especially for an outfit that holds supervisory mandate over majority of players in the financial ecosystem in Ghana.

“It is instructive that the apex bank releases its annual report in line with the law that establishes it and clothes it with the power to manage the financial services sector along with allied institutions.

“The same BoG that supervises banks and other deposit-taking outfits and taking stern action on some of them as happened with the banking sector cleanup, is also subjected to critique where necessary because of its annual report,” Dr. Ali pointed out in an interview with GhanaWeb.

He observed that it was instructive that the Central Bank has been consistent in releasing its annual report, stressing: “my checks on the BoG website shows that there are annual reports dating as far back as 2004.”

On the importance of the report repository, the IFRIG boss emphasized: “these reports serve a myriad of professionals and institutions by way of presenting official BoG records. This report would serve economists, banks, international partners, students and the media for years to come.”

He is, however, concerned with the losses that the bank has recorded in the year under review and in the record loss in the year before.

The bank reported a loss of GH¢10.5 billion for the 2023 financial year, significantly lower figure from the GH¢55 billion loss in 2022.

“Losses are a part of the financial sector but as best as possible, the BoG must do all it takes to lower losses year-in-and-out.

"With that said, there is the urgent need for the politicization of the bank’s losses to be toned down even as existing regulatory laws are strictly enforced to keep the bank in check,” he added.

About the BoG’s losses

According to the BoG governor, Ernest Addison in his foreword, the loss resulted from a substantial increase in total interest expenses on open market operations by the Central Bank.

“In 2023, the global economy was characterised by uncertainties in the first half of the year. Despite these uncertainties, global economic activity rebounded in the second half of the year, amid solid demand and resilient labour markets.

“Global inflationary pressures also eased substantially, though headline inflation remained above target in many countries. The deceleration was driven, in large part, by declines in energy and food prices.

“This led to a pause in policy rate hikes by several central banks, but the lagged effects of previous policy tightening measures kept global financing conditions tight in the near-term,” Addison wrote.

About IFRIG

IFRIG is first and foremost, a research institution focused on the Islamic Banking and Finance ecosystem in the country and West African subregion.

"Our efforts currently pivoted in the area of research, advocacy and capacity building has the medium to long term aspirations of leveraging on research to usher Ghana into an incremental adaptation of Islamic finance – banking and insurance," a post on their website read.

IFRIG’s flagship programme is the the Islamic Finance International Conference (IFIC).

The annual event, since 2020, has pooled together experts from Ghana, the West African subregion and beyond to continue sharing perspectives on the importance of non-interest banking and finance for the wider socio-economic good of Ghana specifically and the global economy.