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The Minister for Finance and Member of Parliament for Ajumako Enyan Esiam, Dr. Cassiel Ato Baah Forson, has called on the Bank of Ghana (BoG) to explore internal cost-cutting measures to recapitalize itself instead of relying on taxpayers’ money.
Dr. Forson revealed that the BoG had previously signed a Memorandum of Understanding (MoU) for the government to provide ¢53 billion to restore the central bank’s financial health. However, he explained that such a move would place an unbearable burden on the Ghanaian taxpayer, potentially depriving the nation of essential infrastructure such as roads, schools, and hospitals.
“Remember, in my previous life as the Minority Leader, I kept saying that the Bank of Ghana had generated so much debt, so much deficit. As a result, their balance sheet is not healthy, and they have generated negative equity,
“Apparently, the previous administration in the Bank of Ghana had signed an MoU for the Government of Ghana, or the taxpayer, to recapitalize the central bank with ¢53 billion. I’ve asked the Bank of Ghana to look within, cut expenditure because the taxpayer cannot afford ¢53 billion, I’ve communicated that to governor.
“First of all, they have to look within. You know, you’ve seen their new Head Office, a very big building. They have a choice, a choice to sell and lease back if they want to They have to look within and cut expenditure. The taxpayer cannot afford ¢53 billion.” He stated
The Finance Minister continued, “Giving 53 billion Ghana cities to the central bank will simply mean that we will have to deny the taxpayer some public good, like roads, like schools, like hospitals. Is that what we want? Can we afford it at this stage? The answer is no. We cannot be able to afford that. So the central bank must look within.
He also suggested that the BoG consider liquidating some of its assets, including guest houses, to generate funds for recapitalization.
Despite his firm stance, Dr. Forson hinted at a willingness to negotiate, provided BoG made significant efforts to address its financial problems internally.
“They have hotels like guest house and others. Why are they in guest house? Can they sell some of them and use the money to recapitalize? The taxpayer cannot be used as a punching bag. So I’ve said to them they should look within. Luckily for me the governor is on board and I expect the governor to look within and cut expenditure, reflect the needs of the bank.
“If the central bank is able to come to me with a reasonable offer, we can have a conversation. But it must start from them. I have also said that they may have to consider winding back their profit over the next 10 years to recapitalize. That can also be done.” He stated
According to him, the central bank can still survive without a government bailout. He stated, ‘The bank can survive. First of all, they need to generate enough cash as soon as possible to run the bank’s affairs, which I believe they are already doing. Around the world, some central banks have survived with negative equity. It is not unusual; they can do the same.”
Source: Elvisanokyenews.com
