John Kumah ‘Rubbishes’ The Claims By The Minority That Bank Of Ghana Is Being Collapsed

Honourable John Ampontuah Kumah, a Deputy Minister for Finance, has rubbished claims by the NDC Minority in Parliament that the Bank of Ghana (BoG) is being collapsed by the NPP government. According to him, the BoG is solid. He also debunked their unsubstantiated allegations that Government is in the process introducing a recapitalization levy for the resuscitation of the BoG.

The Minority in Parliament led by the Minority Leader, Hon Dr Cassiel Ato Forson, on Tuesday, August 8, 2023, held a press conference lashing out at the government, and demanding among other things the resignation (within 21 days) of the Governor of the BoG over alleged mismanagement of the nation’s central bank.

However, responding to the Minority, the Hon Deputy Finance Minister and Member of Parliament for the Ejisu Constituency, Hon John Kumah, in a facebook post on Tuesday, August 8, 2023, rubbished their allegations describing same as untrue.

“It’s not true that a recapitalization levy is to be introduced for BoG, the Central Bank hasn’t collapsed”, he emphatically stated.

The Hon Deputy Minister however acknowledged that the Bank may be going through some temporary challenges occasioned largely by the decline in government transactions in the nature of fees and charges on all government transfers.

He observed that since government transactions which is the main source of income to the BoG, have gone down, naturally, the income of the bank will also go down. Also, because of the recent debt restructuring, earnings on the bank’s holdings on markable and non- marketable bonds had gone down.

“Beyond this, the Bank is solid and is capable of performing its core function. Article 183 clause 2 (c) of the 1992 constitution enjoins the Bank of Ghana to promote and encourage economic development in the country, hence there is nothing untoward in the actions of the Central Bank to support the state in its economic recovery efforts”

The Ejisu Member of Parliament further also emphasized that that a negative balance sheet in books of a Central Bank is not unusual. In fact, most Central Banks around the world run negative balances to achieve the overall economic anchor objectives of Central Bank.

Hon John Kumah made reference to the findings of the Bank for International Settlements Bulletin which revealed that, several central banks had negative equity yet fully met their objectives – for example, the central banks of Chile, Czechia, Israel and Mexico experienced years of negative capital but were nonetheless able to maintain financial and price stability.

Again, the Deputy Minister referenced Nordstrom and Vredin (2022), which noted that a central bank’s credibility depends on its ability to achieve its mandates. Losses do not jeopardise that ability and are sometimes the price to pay for achieving its aims.

He advised the NDC Minority to desist from indulging in such propaganda and unwarranted attacks at the nation’s central bank because such posture could only result in increased market volatility, panic selling of assets, and can trigger chain of events that can affect our overall economic stability.