Banking consultant Richmond Atuahene has made a strong call for accountability regarding the Bank of Ghana’s (BoG) staggering GH₵53 billion negative equity.

According to him, those responsible for breaching financial regulations must be held accountable, as their actions have significantly impacted the nation’s financial stability.

Dr. Atuahene argues that the individuals behind this financial mismanagement should be summoned before Parliament to explain their actions. He thus, highlighted a major breach of financial regulations.

“There was a law that stated they should not exceed a 5% fiscal financing threshold, yet they went as high as 60%. This is a clear violation, and they cannot claim ignorance. The Governor, the Minister, and those involved must be held accountable for their actions.”
Richmond Atuahene

His concerns come in response to recent remarks by the Finance Minister, Dr. Cassiel Ato Forson, who advised BoG to consider internal cost-cutting measures instead of relying on taxpayer funds for a bailout. Given the nation’s current fiscal constraints, Dr. Atuahene agrees that government intervention in recapitalizing the central bank is not a viable option at this time.

“Like the Minister said, you don’t create a mess and leave it for others to clean up. Whoever created this mess must take personal responsibility. When they engaged in the monetisation of fiscal deficits in 2021 and 2022, some of us warned them about the consequences, but they didn’t listen.”
Richmond Atuahene

Exploring Internal Solutions

Dr. Atuahene insists that rather than depending on external funding, the Bank of Ghana should focus on internal restructuring, cost-cutting measures, and asset sales to raise the necessary capital. He specifically suggested a sale-leaseback arrangement on some of BoG’s properties as a potential strategy to generate funds.

He also raised concerns about the long-term implications of BoG’s negative equity on Ghana’s financial credibility.

“This affects Ghana’s credibility. BoG has correspondent relationships with the Bank of England, the Federal Reserve, and the African Development Bank. If it continues to operate in a capital-deficient state, international institutions may lose confidence in our financial system.”
Richmond Atuahene

One of Dr. Atuahene’s main criticisms of the central bank is its continued assertion that it is “policy solvent.” He argues that capital solvency is a more pressing issue in this case.

“You can claim policy solvency all you want, but if you are capital insolvent, it means you cannot function properly. BoG has been making losses year after year. They made losses in 2023, and they are making losses in 2024. How long will this continue?”
Richmond Atuahene

The implication of BoG’s financial struggles extends beyond domestic concerns. If the central bank remains in financial distress, the entire Ghanaian economy could face severe repercussions. The loss of investor confidence and the inability to maintain international financial relationships could put further strain on the nation’s economic stability.

The call for accountability is not just about financial regulations but also about restoring public and investor confidence in Ghana’s financial institutions. Dr. Atuahene’s argument highlights the need for those who made the decisions leading to BoG’s negative equity to take responsibility.

Financial mismanagement at the central bank affects every sector of the economy, from inflation control to investor confidence and banking sector stability. With Ghana already facing economic challenges, a well-functioning and financially stable central bank is crucial in restoring economic growth and stability.

Moving forward, it remains to be seen whether Parliament will take up Dr. Atuahene’s recommendation and summon those responsible for questioning. However, the discussion around BoG’s financial mismanagement is unlikely to die down, especially as the central bank continues to struggle with losses.