The Bank of Ghana (BoG) paid a colossal amount of US$117,150,255.37 to contractors for various projects in the country in 2022, when Ghana witnessed an economic crisis.

According to the Auditor-General in its report christened "Consolidated Statements of Foreign Exchange Receipts and Payments of the Bank of Ghana (BoG) for the year ended 31 December 2022", the amount paid was 263.3 per cent higher than US$32,246,487.75 for the corresponding period of 2021.

"The upsurge was attributable to the construction of Bank of Ghana Corporate Office in Tamale and Sports infrastructure for the hosting and organization of the 13th African Games, Accra 2023 accounting for 30.7% and 30.5% respectively of the total amount ofUS$117,150,255.37," the report added.

In a breakdown, it was revealed that Messrs Goldkey Properties Limited received payment of $35,909,067.50 for the construction of a new corporate head office for Bank of Ghana.

An amount of $35,701,405.64 was paid to Messrs Contracta Construction UK Limited for the Sports Infrastructure for theHosting and Organisation of 13th African Games, Accra 2023.

Messrs Maripoma Enterprise Limited was paid $20,788,740.83 for the rehabilitation of Ofankor-Nsawam Road (Dual Carriageway)

Economic crisis in 2022

In early 2022, sovereign spreads on Ghana’s Eurobonds widened, and Credit Rating Agencies further downgraded Ghana’s sovereign debt rating.

This, the Central Bank noted effectively blocked Ghana’s access to the international capital markets in 2022, a resource which the budget had relied on to borrow about US$3 billion annually to help close the financing gap.

Losing access to the international capital market for new financing immediately triggered a liquidity crisis for Government, spilling over into a balance of payments crisis as the country had to continue to honour its debt service obligations, energy payments, and import bill.

In keeping up with these critical external payments, the Bank of Ghana lost US$500 million in external reserves in just twomonths, with no new inflows of foreign currency from the usual annual Eurobond issuance by Government to replenish its reserves.

Furthermore, to help address Government’s liquidity crisis, the Bank extended additional overdraft to the government to address auction failures and prevent domestic default, and enabled government to meet domestic debt obligations and other critical payments needed to avoid a disorderly halt to economic activity.

Throughout the first half of 2022, there was no new foreign financing until July when the Afrexim Bank stepped in to support with US$750 million.

These circumstances led the Government to approach the IMF for support in July 2022.

Among the corrective measures that were put into place in 2022 to manage the crisis, in particular the major policy effort designed to put Ghana’s debt on a sustainable path included the Domestic Debt Exchange (DDE) program, where the stock of Government of Ghana/public sector debt was to be halved from 105 percent of GDP to 55 percent of GDP by 2028.

Minority reacts

On August 9, the Minority in Parliament issued a twenty-one-day ultimatum for the Governor to resign, which has now elapsed. According to the minority, the Governor has overseen irresponsible government spending and has contributed to the persistently high inflation rate, which remained above 40% in August 2023.

Furthermore, the minority contends that the Central Bank engaged in extravagant expenditures in 2021 and 2022, leading to such a substantial loss. They pointed out that the Bank of Ghana's foreign and domestic travel expenses amounted to a staggering GHS97.4 million, marking a 246% increase from the previous year.

Additionally, the Bank of Ghana allocated GHS8.6 million solely for Director's remuneration, signifying an 87% increase from the previous year's expenditure. Furthermore, the decision to invest $250 million in the construction of a new head office in Accra was questioned.

In contrast, Finance Minister Ken Ofori-Atta believes that the central bank remains financially prudent, robust, and is operating efficiently.