Organizers of the #OccupyBoGdemo led by minority National Democratic Congress (NDC) Members of Parliament (MP) have vowed to re-group and present the petition to Bank of Ghana (BoG) Governor Dr Ernest Addison in the days ahead.
Although the protesters were prevented from accessing the central bank on the basis that it is a security zone, the leadership of the party including the MPs were allowed access to present their petition to the governor.
Leaders of the protest refused to present the petition Wing Commander Kwame Asare Boateng, head of security at BoG and a host of the Bank’s leadership delegated to receive the petition on behalf of the Governor.
The protesters were told that Dr Addison, his deputies and other officials of BoG were in a meeting with officials of the International Monetary Fund (IMF) and were therefore unavailable to receive the petition.
However, the absence of the Governor and his two deputies infuriated the organizers led by the Minority Caucus in Parliament who refused to present the petition.
The #OccupyBoG demonstration was organized by the NDC minority group in Parliament, pressure group Arise Ghana, and other groups to demand the resignation of the governor of BoG and his two deputies.
The protestors accused Dr Addison and his deputies of gross mismanagement of the central bank, citing the over GH₵60 billion loss by the BoG as the basis for their call for their resignation.
They also accuse him of overseeing reckless expenditure, including the construction of the new $250 million Bank of Ghana headquarters.
Minority Leader Dr Cassiel Ato Forson described the Bank’s delegation of Head of Security to receive the petition as disrespectful..
“Now that he has decided to disrespect us, we will not present our petition, and so we will go and come back again. Until we see him, this is just the beginning,” he added.
He was of the view that despite the IMF Dr Addison could have spared 10 minutes of his time to receive the petition and return to the meeting.
Dr Ato Forson said their petition contains more than just the resignation of BoG leadership.
Addressing the protestors, General Secretary of the NDC, Johnson Asiedu Nketia said, IMF is not more important than Ghanaians whose taxes are used to pay him.
He directed the Minority to boycott Dr Addison whenever he comes to Parliament to make any presentation.
The organizers of the #OccupyBoGdemo threatened to hold countless protests if Dr. Addison, and his deputies fail to step down.
Some of the MPs who took part in the protest include Samuel Okudzeto Ablakwa, Mahama Ayariga, Francis-Xavier Sosu, Cletus Avoka, Clement Apaak, and Kwabena Mintah Akandoh, as well as some national executives of the NDC.
Clement Apaak, the deputy ranking member on the education committee said “We are here because we want a public expression of the disappointment by the management of the Bank of Ghana and with this we are calling on the Governor of the BoG to resign and he has failed to do so. And we think that we have to lead this prominent protest to tell Ghanaians of our dissatisfaction with the incompetence in the management of the BoG,” he said.
Member of Parliament for Ningo Prampram, Sam Nartey George, has described the governor of the Bank of Ghana, Dr. Ernest Addison as a coward and a colossal failure.
North Tongu MP, Samuel Okudzeto Ablakwa said the failure of Dr Addison to receive the petition from the #OccupyBoG protesters is an affront to parliament.
Ablakwa views the BoG Governor’s decision not to receive the petition personally as a sign of disrespect to the minority MPs, and has emboldened them to go after him and his deputies, to ensure that they are held accountable.
Causes of BoG’s losses
The Bank of Ghana recorded GH₵60.8 billion loss in 2022 which was posted to the general reserve account which had some positive balances leading to GH₵55.1 billion negative equity.
BoG absorbed a 50% haircut on its non- marketable holdings of Government debt instruments under Domestic Debt Exchange Programme (DDEP).
This singular act led to significant impairment losses of GH₵32.3 billion to the Bank’s accounts.
Impairments of marketable instruments also accounted for another GH₵16.1 billion, bringing the total impairments of government holdings to GH₵48.4 billion.
As experienced by central banks globally, price and exchange rate movements led to a loss of GH₵S5.2 billion while impairments of Ghana Cocoa Board (COCOBOD) loans amounted to GH₵4.7 billion.
The BoG said the debt written off leading to huge losses included all the legacy debts of the Government of Ghana dating back to 1992.
For example, as of 2015, the accumulated claims on government and COCOBOD amounted to GH₵13 billion.
Losses of Central Banks around the world
Gross unrealised losses of the European Central bank rose to approximately €124 billion in December 2022.
The Reserve Bank of Australia (RBA) recorded a 2022 book loss of 37 billion Australian dollars, which more than wiped out the central bank’s equity.
The UK Government faces £150 billion bill to cover Bank of England’s losses (According to the Financial Times of July 25, 2023).
The Swiss National Bank (SNB) in early January reported a record preliminary loss of 132 billion francs for 2022.
In September 2022, the central bank of the Netherlands notified the country’s government in a letter that it projects net interest losses amounting to a potential EUR 9 billion for the years 2023 through 2026.
The US Federal Reserve has no longer been able to remit weekly billion-dollar transfers to the US Treasury since autumn 2022.
Instead, a debt obligation to the US Treasury (a liability that the Fed recognizes as a deferred asset) has been growing on the Fed’s balance sheet since then.
The Fed eventually will have to pay this liability sometime in the future (when it resumes generating profits).
For the financial year ended 31 March 2023, the Monetary Authority of Singapore recorded a net loss of $30.8 billion.
Does it matter much if central banks are running with negative equity? Not necessarily.
There is no economic logic that compels a functioning central bank to have positive equity.
Central Banks can operate effectively even with negative equity, as the central banks of Chile, the Czech Republic, Israel and Mexico have done over several years.