The Bank of Ghana (BoG) has attributed the “sharp jump” in its operational expenses to largely the “sharp” depreciation of the Cedi against the Dollar and the rise in inflation in the 2022 financial year.

The Bank explained that the two variables impacted its vehicle maintenance, communication, foreign and domestic travels, and External Directors expenses among other operational demands.

Responding to some accusations of mismanagement by the Minority in Parliament, the BoG said “inflation and exchange rate movements in 2022 had a significant impact on the operations of the Bank and every other entity in the country”.

The Central Bank noted that the year 2022 was the peak of economic and social crisis in Ghana and added that “comparing 2022 financial performance with 2021, without taking cognisance of the economic situation in the country is misleading”.

Explaining what accounted for the rise in its vehicle maintenance expenses, the BoG said, “For 2022, the fuel cost increased by 123.3 per cent compared to 28.9 per cent in 2021. This was on the back of petrol and diesel prices increasing from GHC6.6618 per litre of petrol, and GHC6.665 per litre of diesel at the end of 2021 to GHC 16.5811 per litre of petrol and GHC19.6053 per litre of diesel at the end of 2022. This implies increases of 149 per cent (Avg. 87 per cent) and 194per cent (Avg. 122 per cent)”.

On the issue of waiver or write offs without recourse to Parliament, the BoG explained that the Minister for Finance in his 2023 budget statement, which was approved by Parliament, had the policy of debt restructuring as a key policy initiative. The Central Bank said any further discussion on parliamentary approvals beyond what was approved in the 2023 budget would be handled by the Ministry of Finance.

“Secondly, beyond the parliamentary approval, the IFRS accounting standard, which requires the full implementation of the Expected Credit Loss (ECL), meant that the mere announcement by the government of a debt restructuring would trigger ECL applications and impairment charged. On this score, the issue of parliamentary approval or not would not stop an ECL application and impairments on the books of BoG.”
Bank of Ghana

GHS97.4 million Spent On Foreign and Internal Trips

The Bank of Ghana further explained that the GHS97.4 million it spent on foreign and internal trips in 2022, was also impacted by the foreign exchange rate and inflation.

Meanwhile, this amount, according to the main opposition National Democratic Congress, represented a 246% increase over the previous year’s.

The Central Bank stressed saying “Like other expenditure lines, the foreign and domestic travels reflect sharply the exchange rate and inflation effects, and not necessarily increased number of travels”. The bank indicated that its supervision staff travel to “visit every single regulated institution and their branches, spread all over the country, at least once a year. This is a huge operation and a core function of the bank, which constitutes a significant expenditure line of the bank’s operations”, the statement said.

In addition, the Bank of Ghana said it “takes continuous professional development seriously to maintain the standards required of a modern central bank”.

The Bank of Ghana noted that the “major item” under its GHS32 million communication expenditure for 2022, was electronic data transmission charges, including the Reuters and Bloomberg platforms, which “support our reserve management and management of petroleum funds, as well as currency and exchange rate”.

These constituted about 57.4% of the total communications cost, the central bank said in a press statement. “This was followed by the publications and gazettes (15%), advertisement (10%), newspapers local (0.75%) and newspapers foreign (0.46%)”, it added.