Ghana’s Finance Minister Reveals GHS 53 Billion Needed for Central Bank Bailout

Ghana’s Finance Minister, Dr. Cassiel Ato Baah Forson, announced that the Bank of Ghana needs a GHS 53 billion bailout to tackle negative equity. The government’s total arrears have risen to GHS 67.5 billion, with significant amounts owed in the road and electricity sectors. Immediate financial measures are vital to stabilize operations and settle debts.

In a significant announcement, Ghana’s Finance Minister, Dr. Cassiel Ato Baah Forson, has stated that the Bank of Ghana (BoG) requires a substantial bailout of GHS 53 billion to alleviate its negative equity issues. During his presentation of the 2025 Budget Statement to Parliament on March 11, 2025, he highlighted the pressing financial challenges the central bank is currently facing, emphasizing the necessity of this bailout for operational stability.

Dr. Forson revealed that as of December 2024, the total arrears of the central government reached GHS 67.5 billion, equating to 5.2 percent of Ghana’s Gross Domestic Product (GDP). He pointed out that within this total, the road sector alone accounted for GHS 21 billion in arrears, underscoring the significant fiscal strain on the government’s budget.

Upon assuming office, Dr. Forson noted a surge in payment requests from contractors and suppliers, prompting the Ministry of Finance (MoF) to formally request a detailed account of all outstanding arrears from various Ministries, Departments, and Agencies (MDAs) on January 28, 2025. Following this, a special hearing was conducted, revealing an alarming total of GHS 67.5 billion owed to contractors and suppliers.

The arrears consist of GHS 49.2 billion in unpaid interim invoices along with GHS 18.3 billion related to bank transfers within the Controller and Accountant General’s Department. Additionally, the Finance Minister highlighted that this GHS 67.5 billion figure does not include significant debts, such as $1.73 billion owed to Independent Power Producers (IPPs), GHS 68 billion owed by the Electricity Company of Ghana (ECG) to contractors, and GHS 32 billion owed by COCOBOD.

In conclusion, the urgent requirement for a GHS 53 billion bailout by the Bank of Ghana highlights the critical financial challenges faced by the country’s central bank amidst an existing GHS 67.5 billion in arrears owed by the government. The situation reflects broader fiscal issues impacting various sectors, especially the road sector. Immediate interventions are essential to stabilize financial operations and address the arrears owed to contractors and other stakeholders.

Original Source: www.gbcghanaonline.com