The Bank of Ghana (BoG), has told the Public Accounts Committee (PAC) that it has significantly reduced its support to the budget in compliance with the directive that placed a cap on the bank’s financing.
At the PAC sitting on Wednesday, September 2, First Deputy Governor of the BoG, Dr. Maxwell Opoku Afari, said they are fully complying with the directive.
“A cap was placed on the Central Bank’s financing, not exceeding five percent of previous year’s revenue. At the time of amending and placing that cap, the stock of central bank financing as at that time before the Act came into effect was far exceeding that 5 percent. So the understanding and interpretation was that that stock was ringfenced and going forward, the Central Bank will then not finance budget beyond 5 percent,” he indicated.
“I want to put on record that since that Act came into effect, the Central Bank has also entered into an MoU with the Ministry of Finance and we have actually limited it to zero percent. So right from 2016 when the Act came into effect till now, the Central Bank’s financing to the budget has been zero percent until recently when we triggered session 30 and went into the asset purchase program,” he added.
The Bank of Ghana in 2018 recorded a loss of GHS793 million resulting from its operations, according to the bank’s 2018 Annual Report.
The figure represented a more than 50 percent drop from the GHS1.6 billion the bank made in 2017 when the troubles from the banking sector were at their peak.
The central bank’s Annual Report published on its website revealed that the bank succeeded in reducing its cost of operations from GHS4.4 billion in 2017 to about GHS3.9 billion in 2018.
In terms of income, the bank generated GHS3.1 billion in the year under review – a figure which was an 11.4 percent improvement of the amount realised in 2017.