Finance Minister Dr. Cassiel Ato Forson has rejected taxpayer-funded recapitalization for the Bank of Ghana, urging asset sales and expenditure cuts. He highlights the risk of sacrificing public services for a proposed GH¢53 billion bailout. Forson signals openness to negotiation if BoG demonstrates internal financial restructuring efforts.
Finance Minister Dr. Cassiel Ato Forson has emphasized that taxpayer funds will not be utilized for the recapitalization of the Bank of Ghana (BoG). Instead, he insists that the central bank should manage its financial challenges through alternative measures, including asset liquidation, to generate necessary capital. This directive follows the previously proposed GH¢53 billion bailout agreement signed with the prior administration to alleviate BoG’s financial difficulties.
In discussing the Bank of Ghana’s current position, Dr. Forson referenced a report highlighting a significant financial deficit of GH¢60 billion. He noted that during his tenure as Minority Leader, he had raised alarms regarding BoG’s accruing debts and negative equity on its balance sheet, indicating an unsteady financial state.
Amidst the ongoing fiscal issues, Dr. Forson instructed BoG to prioritize cost-cutting measures rather than shifting the financial burden onto taxpayers. He pointed out that the financial commitments made by the previous administration are unsustainable, urging the central bank to reassess its expenditure, particularly concerning its recent investments such as a new headquarters.
Dr. Forson suggested that BoG could sell its newly constructed head office and lease it back as a strategy to raise capital. He also advised the bank to consider divesting from its guest houses and hotels, emphasizing that such ventures are not essential for a central banking institution.
He articulated the potential consequences of allocating vast amounts of taxpayer funds to BoG, stating, “Giving ¢53 billion 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?” This concern highlights the potential negative impact on critical public services if such financial support were provided.
While firm in his position, Dr. Forson expressed a willingness to renegotiate if BoG presented a convincing plan demonstrating their own efforts to remedy the situation. He also proposed a gradual recapitalization plan whereby BoG could reinvest its profits over a decade to stabilize its finances.
In conclusion, Finance Minister Dr. Cassiel Ato Forson has decisively ruled out taxpayer-funded recapitalization for the Bank of Ghana, urging the institution to seek internal solutions. By promoting asset liquidation and urging significant reductions in spending, the Minister aims to prevent placing additional financial burdens on citizens. The government’s emphasis on requiring BoG to demonstrate proactive financial management marks a critical stance towards addressing the central bank’s fiscal challenges without compromising public services.
Original Source: www.graphic.com.gh
