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Prof. John Gatsi Calls for Transparency in Bank of Ghana Recapitalisation

The economist pointed out that such disclosures are standard practice in the banking sector, where universal banks routinely announce their recapitalisation plans to shareholders and the public.

Prof. John Gatsi, an economist and financial expert, has emphasised the critical need for transparency in the recapitalisation process of the Bank of Ghana (BoG).

In a social media post, he noted that since the global financial crisis of 2007, recapitalisation has been a vital policy tool to address financial instability and bolster confidence in Central Banks worldwide.

Prof. Gatsi underscored the importance of dealing decisively with negative net worth and losses within the BoG, stressing that transparency in this process is essential for maintaining public trust and ensuring the effective delivery of monetary policy objectives, price stability, and economic development mandates.

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“A call for recapitalisation is a serious one for the BoG and its stakeholders,” Prof Gatsi remarked, urging the Central Bank to disclose key details such as the amount required for recapitalisation, the timeline for completion, strategies for raising the necessary funds, and the potential fiscal implications.

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He pointed out that such disclosures are standard practice in the banking sector, where universal banks routinely announce their recapitalisation plans to shareholders and the public.


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Prof Gatsi who is the Dean of the University of Cape Coast Business School emphasised that a mere memorandum of understanding between the BoG and the government should not suffice, urging for concrete steps and clear communication from the Central Bank.

“The BoG must clarify financial details, execution strategies, and set clear deadlines for the recapitalization exercise to ensure accountability and bolster confidence in Ghana’s financial regulatory framework,” Prof. Gatsi asserted.

His call comes amid growing discussions on strengthening the BoG’s financial position to enhance its regulatory effectiveness and stability in Ghana’s banking sector after the planned recapitalisation of the Bank by the government resurfaced in the news.

The recapitalisation of the Central Bank has become necessary following its huge exposure to the government, leading to huge losses in two consecutive years. The bank posted a loss of GH¢10.50 billion and ¢60.86 billion in 2023 and 2022 respectively.

The BoG financed the government deficit by GH¢ 37.9 billion, representing what the Bank said was an “overdraft extended to Government”, alongside purchases of government bonds and other financial transactions, culminating in a total exposure of GH¢44.5 billion in 2022.

The International Monetary Fund (IMF) has consequently advised the government to recapitalise the BoG, with expectations for a forthcoming memorandum of understanding between the government and the central bank to formalise this initiative.

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