Recapitalisation of BoG apt; negative equity not due to recklessness – Financial analyst

A financial analyst, Dr. Michael Dawson, has commended the government for its decision to recapitalize the Bank of Ghana (BoG), stating that it was the right move since the Central Bank saved the economy from troubles.

He also refuted the claim that BoG's management had been reckless in their duties which incurred some impairment losses in 2022 as a result of government Debt Exchange Programme.

Dr. Dawson was responding to a tweet by the Minority Leader in Parliament, Cassiel Ato Forson, who implied that the Central Bank had been poorly managed, leading to its recapitalization.

He explained that the Bank of Ghana suffered significant losses due to the Domestic Debt Exchange Programme, justifying the government's decision to recapitalize it.

"Bank of Ghana took a major hit due to the DDEP, so it is appropriate for the government to recapitalize it. We all know that the Bank of Ghana absorbed significant losses to ensure the country qualified for the IMF program," he said.

According to Dr. Dawson, the government's resources allocated to recapitalize the National Investment Bank (NIB) should instead be directed towards the recapitalization of the Bank of Ghana to strengthen its ability to fulfill its mandate.

He praised the current management of the Bank of Ghana, led by Dr. Ernest Addison, for their handling of the financial sector during crises and pandemic years, noting that their decisions had greatly benefited the economy.

“We are witnesses to the work of the current management of the Bank of Ghana led by Dr Ernest Addison. I think we should celebrate the Governor Addison led management for the way they have managed the financial sector. If you look at the decisions that they took during the crisis and pandemic years, they have really helped the economy”.

Dr. Dawson emphasized that it is irresponsible to attribute the need for recapitalization solely to recklessness, as the impact of the DDEP on the Bank of Ghana's balance sheet was acknowledged by the International Monetary Fund, Bank of Ghana, and Ministry of Finance.

He also expressed confidence that the measures outlined in the Central Bank's 2023 Annual Report and Financial Statement would help restore capital.

Dawson urged politicians to be cautious in their remarks about the Central Bank, emphasizing its credibility and importance in Ghana's economic development.

MA