Dr Cassiel Ato Forson, the Minority Leader, has accused the Central Bank of causing the depletion of Ghana’s external reserves.
During his debate on the 2023 Mid-Year Budget Review in Parliament on Wednesday, August 2, 2023, Dr Ato Forson attributed the unprecedented depreciation of the Cedi in 2022 to the Bank of Ghana’s printing of money.
“…..the Bank of Ghana’s printing of money caused the depletion of Ghana’s external reserves which resulted in the unprecedented depreciation of the Cedi, the main cause of the hyperinflation in 2022”.
The Cedi, he said, depreciated from GH¢6:$1 to over GH¢15:$1 in the year 2022, adding “This is over 100% depreciation on a straight line calculation”.
The currency’s significant decline, coupled with soaring inflation rates, has adversely affected the nation’s socioeconomic landscape.
Dr Ato Forson pointed out that the inflation-driven hardships have pushed an estimated 850,000 individuals further into poverty, according to the World Bank’s report.
The Minority Leader stated that despite earlier denials, the government now admits that the Bank of Ghana resorted to printing money to fund its extravagant government expenditures in 2022.
“…..the government now admits that indeed the Bank of Ghana printed money to finance its over-bloated government expenditures in 2022”.
“Paragraph 8 of the IMF Staff Report gives further detail that the Bank of Ghana illegally printed over GHC45 billion representing 7.2% of GDP in 2022 alone, and GHC35 billion in 2021. This is the first in the history of Ghana”, he said.
Characterizing the Central Bank as a “crime scene,” Dr Ato Forson criticized the government for complicity in the Bank’s actions.
“The Bank of Ghana is certainly a crime scene and the economic managers led by Mr. Strategist aided and abetted this economic crime”, Dr Ato Forson added.
He further pointed out that under the current economic managers’ watch, Ghana’s public debt skyrocketed from GHC120 billion in 2016 to GHC600 billion by the end of 2022, representing a staggering 400% increase.
“As a result of these high debt levels, Ghana defaulted in the repayment of both our domestic and foreign debts, the first time in our history”.
This dire situation led to pensioners picketing at the Ministry of Finance to demand their interest and principal payments, and rating agencies downgraded Ghana’s creditworthiness to “D” or “super junky.”
The financial sector in Ghana has faced significant challenges, with all 23 banks recording massive impairment losses of over GHC18 billion in 2022. Dr Ato Forson highlighted the urgent need for attention to address the financial distress and bankruptcy of the Bank of Ghana, which suffered a loss of over GHC60.8 billion and negative equity of over GHC55.1 billion in 2022.
“in fact, the Bank of Ghana is in major financial distress and bankrupt, and requires urgent attention,” the Ajumako-Enyan-Esiam MP said.
The economic “mismanagement” by the Akufo-Addo/Bawumia government, according to the Minority Leader, has had far-reaching consequences, affecting not only commercial banks but also adversely impacting the Central Bank’s stability and financial well-being. Urgent measures are required to address the prevailing economic challenges and stabilize Ghana’s financial sector.
