Bank of Ghana Governor Dr. Ernest Addison has strongly defended the Central Bank’s decision to finance government expenditure in 2022, asserting that the intervention was necessary to prevent a total economic collapse.
Addressing the Chartered Institute of Bankers, Dr. Addison explained that the bank’s actions, which led to a reported GH₵60 billion loss that year, were taken during a period of extreme financial distress. He argued that the Bank’s role has been widely misunderstood and unfairly criticized, particularly following public demonstrations and calls for his resignation from the Minority caucus in Parliament.
The Governor highlighted that the crisis was driven by a combination of COVID-19 pandemic costs and the global economic fallout from the Russia-Ukraine war. By 2022, Ghana was effectively blocked from international capital markets, missing out on $3 billion in planned external borrowing.
With annual debt service and energy payments ranging between $3 billion and $4 billion, the lack of new financing triggered an immediate liquidity crisis. Dr. Addison revealed that the Bank of Ghana lost approximately $500 million in reserves within just two months to stabilize the situation while significantly increasing the government’s overdraft facility.
According to Dr. Addison, the situation was so dire that an IMF mission in July 2022 concluded the economy was at a “tipping point.” He noted that there was no new foreign financing available until a $750 million support package arrived from Afreximbank later that month.
The Governor maintained that the Central Bank and the IMF mutually agreed that the BoG should continue providing emergency support to keep the country running until a formal reform program could be established to trigger official IMF funding.
