[Hot Debate] Bank of Ghana Loss: Bawumia's Advisor Dr Gideon Boako v Economist Ebo Turkson🇬🇭🔥🥵

Ajouté : 2026-05-13

[00:00:00]Um, so I'm not here to speak for the central bank. Um, >> yeah.

[00:00:03]>> Um, I'm speaking as somebody from academia.

[00:00:06]>> Mhm.

[00:00:06]>> And then possibly because I'm also a member of the MPC, >> the monitor.

[00:00:10]>> Yeah. Committee. So I have some insight into the decisions that we made as far back as 2022 when we at the height of the crisis. Um I've said time and again that uh economic policy especially monetary policy is a public good and like every public good um it comes with a cost and um but normally when you want to assess a central bank for the mandate for which it is set up you look at the the the policy objectives and whether the central bank has met those objectives that is the mandate of the central bank. So as much as the financials will show a loss, the question is that what did what was the public good from that that activity um you you would see that right from 2022 when Ghana began to go through crisis um [snorts] um and um inflation hits almost 54%. Um the central bank's core mandate is to maintain price stability and so the central bank is supposed to devise all the tools he has available to try as much as possible to bring down inflation and so so in 2022 at the height of the crisis. The central bank made very good decisions, employed all the monetary policy tools that were available and the the most uh preferred one has always been the open market operations where you go onto the market especially in the banking system to mop up the excess liquidity and when you do these things it comes with a cost because when you take the monies from the bank you need to compensate them for keeping that money but your focus is to fight inflation and therefore normally the interest cost is expected from that policy choice. And so um the central bank has had to pay a high price for for for picking up that excess liquidity in the system. And so over the years we've seen the central bank pay huge interest and and especially for us because at that time inflation was high and you know the compensation for the taking away the money from the banks is almost close to the monetary policy rates.

[00:02:22]That's a conversation and therefore at that time when we were trying to fight inflation policy rate was high it meant that it was going to translate into a much higher cost.

[00:02:31]>> Mhm.

[00:02:31]>> And we've had this discussion in 2023 2024 and up to now. And so the the interest cost has been a major component of that.

[00:02:42]>> Interest cost of what?

[00:02:43]>> Of the open market operations.

[00:02:45]>> Open market operations.

[00:02:46]>> Yes. Open market operations are the central bank sells it what you call the bank of Ghana bills to the banks.

[00:02:52]>> Gives money to the banks.

[00:02:53]>> No, it gives them bills. [snorts] >> What's what's in the bill?

[00:02:56]>> So a bill is an instrument.

[00:02:58]>> Okay.

[00:02:58]>> And then >> promise.

[00:03:00]>> Yes. It takes the money from them. Cuz when the money >> What is he promising when he takes the money from them?

[00:03:04]>> Interest. You pay interest on what? The money.

[00:03:06]>> So give me 100 million of your money.

[00:03:08]Yes.

[00:03:08]>> So you don't have it. But when I'm paying back, I'll pay you 110.

[00:03:11]>> The interest. There's an interest at the monetary policy.

[00:03:13]>> Agreed. Interest.

[00:03:14]>> Yeah. Yeah. I mean the monetary policy the banks are aware that is the normal framework for doing that.

[00:03:18]>> So you're building up to how how the reports came out.

[00:03:21]>> Yeah. The the content of the report >> precisely the laws. Yeah. So so that operation by the central bank always comes with a cost and it is every central bank goes to that cost. I mean it's um and so that was one of the major costs that that we've seen.

[00:03:37]>> Policy cost.

[00:03:37]>> It's a policy cost. All the discussion engaging and incurring cost because you are on a policy to mop up excess liqu >> precisely to fight inflation.

[00:03:47]>> All right. So that you fight inflation so that prices don't run a >> precisely because inflation is the is the is the most how do I put it?

[00:03:58]Inflation is anal >> in the sense that it takes away our purchasing power >> right from the president to the lame person on the street. Unlike the conventional way, >> it reduces the amount of things your money can buy.

[00:04:09]>> Precisely. Okay.

[00:04:10]>> And it transmits a lot of instability into the economy >> clearly. Yeah.

[00:04:15]>> And therefore it makes it difficult for investors to even plan or businesses to plan for investment to bring their money.

[00:04:20]>> So the central bank's principal role is to manage inflation.

[00:04:24]>> Yes. Price stability and he uses the tools that he has available to to to manage that process. And so once and you remember in that first year of the fight against inflation, inflation dropped by almost half as a result of these tools that were being used. Now in 2025, if you look at the financial statement, I'm not speaking on the finance. I'm looking at economic aspects and the greater good of what the balance sheet of the central bank and his income statement is saying 2025. If you look at 2025 and the amount of losses the central bank has made, the central bank has become a victim of its own performance.

[00:05:08]>> A victim of its own performance. What do I mean by that? Now when you have assets in in in foreign currency, foreign assets and your domestic currency appreciates, right, the assets in your books have to be valid in your domestic currency. And when your domestic currency appreciates, the city value of those assets will have to be reduced. I'll give you an instance. Suppose you hold a foreign asset of $1 billion.

[00:05:37]>> You you own it. It's yours.

[00:05:38]>> You own it. So it's part of your asset >> and the exchange rate was 14 CS.

[00:05:44]>> It meant that it translate to 14 billion CDs >> on your in your on your books.

[00:05:49]>> Mhm.

[00:05:50]>> Now when the currency appreciates to 10, that 14 billion becomes 10 billion.

[00:05:54]>> Mhm. So without losing the 1 billion worth of [snorts] the asset the city valuation excuse me has dropped by 4 billion that is a loss to the central bank and so when I say the central bank is a victim of its own >> good performance the stability of the city also brought in itself revaluation losses to the central bank >> but Paul excuse me sorry sorry to your your voice >> I mean if you look at what happened in 5 with appreciation of the city. Don't forget that cumulatively at the height of the crisis right from 2022 to 2024 December [snorts] our CD had lost value by 70 over 70%.

[00:06:38]>> Mhm.

[00:06:39]>> And at that time when we were managing the process the stability of >> Let me hold it. Let me hold it. Let please get the video. Let's play that video again. The one that we played before we came. By the time we come, we got water for him. And it's a very He's building a very solid argument, isn't it? We'll be right back.

[00:07:25]Kevin Kevin Kevin Kevin Kevin Kevin Kevin Kevin Kevin Kevin Kevin Kevin Kevin Kevin Kevin Kevin Kevin Kevin Kevin Kevin Kevin Kevin I think say you need to apologize to the old boy to the old boy.

[00:07:39]Defense Ministry, Defense Minister of Ghana.

[00:07:46]The Defense Ministry, Defense Minister President.

[00:08:19]Kevin Kevin I think say you need to apologize to the old boy defense ministry defense minister Ghana Defense Ministry, Defense Minister President.

[00:09:02]Okay. Yes, Prof. So you were making the point about how the central bank intervenes to keep inflation low.

[00:09:08]>> Yeah. Yes. So the the the other bit of the central bank's role is that inflation has two components. One from food and one from non-food. And normally especially in terms of imported products. Ghana is an import dependent country and therefore um if you don't stabilize the city and the city depreciates it transfers right into domestic prices and therefore with the same amount of goods that you buy you are spending more and therefore that cost transfers into inflation. So the central bank's mandate to fight inflation is also indirectly to maintain the stability of the currency because you cannot fight inflation when a currency is depreciating and therefore the measures that the central bank took in terms of the policy tools the the uh uh CR the currency reserve ratio and the cash reserve ratio all of that and open market operation were all geared towards ensuring that liquidity was taken out of the system to ease the pressure on the demand side for forex as And so in 2025 the central bank was able to achieve some stability.

[00:10:15]Now I was saying that over the 3 years before 2025 the city had depreciated by over 70%. And if it was going to correct it had to appreciate because when there are high volatilities for it to normalize towards it normal trend it has to appreciate to get back to the trend.

[00:10:32]And so Ghana observed a over 40% appreciation of the currency. That appreciation of currency brought enormous benefits to the country. One of them was the fact that the IMF had projected that the city was always going to be almost 15 cities for 2025.

[00:10:50]And it was that projection that the ministry of finance used for his budget of 2025 for the external interest payments that was going to make >> the budget was done in November. Yes, it was done in November in 2020 >> 2024 >> and then >> budget for 2025 >> five. Yes.

[00:11:05]>> Okay. Okay. So, so the number but it was announced budget >> precisely. So the 2025 we have we are talking about 2025 all the discussion 2025.

[00:11:15]>> So when the budget was read at the beginning of 2026 because the new 25 new government had taken place that was the projection that went into the expenditure stream. Now when the city was stabilized around 10.4 Before a lot of savings was made for interest payments and when you when you look at the quantum of that saving and the fact that the appreciation of the currency itself led to a reduction in our extent to 45% shows that the stability of the city had brought in this week a lot of benefits to the country but the central bank had to pay the cost for that because the central bank's income is derived from some of his assets that earn interest. I mean when you begin to talk about the reserves, I'll tell you the dynamics and why the sale took place.

[00:12:05]>> How come the Okay, go on. So, so when that happened and the currency appreciated the central bank had to suffer some revaluation losses and it had to also reflect in the accounts right so you are talking about the cost we're talking about the revaluation losses and then the third one was the domestic gold purchase program that policy intervention somewhere in 2021 2022 2023 was one of the most innovative policies the country had pursued. Why am I saying this? There's nothing wrong if a country has a commodity whose prices are doing well on the market and a country decides to hold especially if they are precious minerals to hold as part of its reserves and gold is one of them for of course most countries hold part of their reserves in gold. So when we started a domestic gold purchase program the idea was to hold part of the reserves in gold. And I remember that over time we even transforming those reserves gold for reserves into gold for oil.

[00:13:09]>> Mhm.

[00:13:09]>> I mean in the sense that at that time you could have a sense that because the central bank didn't have enough reserves and at times the auctions for the BDCs to bring oil was not being met. That sent a signal to the speculators in the forex market and that was part of why the currency was depreciating so fast.

[00:13:28]So a whole lot of factors were influencing the theation of the currency and one of them was that so the gold for oil was to use cities to buy the gold use the gold to bring in oil and so no longer were the BDC's going to bid for forex to bring in the oil but we're using their cities to purchase gold exports the gold some is kept reserves and is used to bring in the oil that was when the depreciation of currency which was over 30% began to tone down to almost 19%. So cumulatively things were happening and the central bank was was clearly focused on what the central bank was doing to try to fight inflation and stabilize the currency. So 2025 was a game changer when the city appreciated.

[00:14:10]It brought so much benefits to the country. So at the macro level Ghana benefit benefited immensely that today the Ghanaian economy is relatively stable than we've seen in the past but it had to come at a cost. The domestic gold purchase program is solved, the way it is framed up and the way the gold is purchased and the price that they are paid to the small scale uh uh producers of gold and the values that central bank uh enters in this accounts by by design comes up with some losses. So that loss from the gold purchase program was also part of it. We build reserves and the reserves began to assure the markets and also to show credibility that central bank had enough reserves to support intermediation in the market and even enough reserve buffers to support the economy in case there was any external shock which over the recent years has become more rap than we expect. I mean Russian Ukraine war we had cover Russian Ukraine war and look at the Middle East war that we are having now. These are external shocks that do not come from my economy. But when you build enough reserve buffers, you're able to withstand the shock and you send a clear signal to especially those on the forex market and investors that your economy will be able to withstand the shock because you have enough buffers to fall on. That was the idea of the domestic gold purchase program and so that also came at a cost. So when you add up these three costs, the central bank incurred a huge cost but the central bank is not a profitm entity. The central bank monetary policy is a public good and a public good comes with cost. For instance, when Ghana decides to build a road from Ara to Kumasi and the road is built. It's a huge amount that is invested in that road. If the road is not told, the money doesn't come back. But what does it do?

[00:16:04]He expands the economy. It allows economic activities to go on and the rippling effect of [snorts] the output that it generates in the economy is what is the essence of that road. And so you should see economic policy especially if you look at the mandate of the central bank price stability, financial stability, supporting growth, ensuring the balance of parent position is is is sustainable. They are all crisis management mandates and that will come at a cost. Every economic policy comes at a cost. So that is how we should look at this.

[00:16:36]>> I'll come back to ask after Gideon has spoken that is it therefore the case that central banks can make losses up to any level and it's it's okay because we we have found losses made in MPP era and bigger losses made in NDC era. Is it is it the case that because they are not a profitm organization because they are supposed to create stability they can make 100 billion losses and that's okay.

[00:16:59]But I'll come back to what I think about that. Let me get Gideon. He's not spoken. Uh again, what's your reaction?

[00:17:04]>> Well, it's not necessarily a reaction, but I mean to state what the position is. Um I I I agree and I also disagree in part that we have to assume that central bank are loss making vehicles.

[00:17:24]That's not the case.

[00:17:24]>> So they didn't say they are loss. He said they are not there to make profits.

[00:17:28]>> I'm not saying I'm not saying >> that's what they said. That's what he said. But I mean that's >> No, I'm not saying that that has been a conversation.

[00:17:38]>> The fact that central banks are not profit making which is contestable in a way does not necessarily mean that it should run at losses. A central bank has operational manual that it works with if you so to speak. And so at any point in time a central bank must execute that its operation such that it minimizes losses or it doesn't incur losses.

[00:18:08]If you take the case of the Bank of Ghana, as has been said earlier relative to other banks, central banks elsewhere, we need to distinguish two things, a crisis period and a noncrisis period.

[00:18:27]In a normal system or period where there are no crisis to the economy, exogenous or endogenous issues, it's it it will be difficult for me to accept that the central bank should run at a loss >> when there are no crisis in >> when there are no crisis. When there's crisis like happened in covid-19 postcoid9 the Russia and Ukraine war so many central banks incur losses at the time the federal reserve bank of the US incur about $192 billion loss the Australian bank about 36.7 billion Australian dollars the European bank about 16 billion German bundes all of that during crisis period it's acceptable because in the crisis period the central bank becomes the thick war that the country falls on >> and they become like you say lender of last resort and make sure that everything is okay in the economy and show stability. Those ones are normal.

[00:19:27]When it happened like that Ghana also incurred some loss in 2022 but when the crisis began to recede you realize that the central banks across the world were beginning to come to a positive position. their losses were minimizing. That is why for Ghana for the loss that was recognized in 2022 about 60 billion which in today's terms would not be 60 billion because the accounting method that was used to calculate that loss is not what we are using today. Today we are talking about treatment in profit and loss and some in uh other comprehensive incomes. At that time all of them were busted together in the profit and loss accounts. So if we had applied the accounting method Bank of Ghana is using today to disagregate [clears throat] the sources of the losses, it is very likely that the 60 billion that we talk about in 2022 would not no longer be 60 billion. But let's put that one aside.

[00:20:30]Even with that, the government managed to put in place measures such that in 2023 the loss had reduced from 60 billion to about 19.2 billion.

[00:20:40]>> That's a significant >> significant. And in 2024 it had reduced to 9.4 billion. So Ghana was on the path of reducing our losses because we had exited the crisis although there were some remnants of the crisis with us coming but the effect and the intensity of the impact was not the same. And so nobody expected that in a postcrisis period where our losses are coming down 2023 it came down 2024 it came down why should it go up in 2025 when we don't have any crisis and I do not also completely agree with the assertion that the central bank of Ghana today and for 2025 is a victim of its own successes.

[00:21:29]No, I totally disagree with that because you have to disagregate the loss and see the various components of the loss or what contributed to the loss. It is there and then that you will know whether or not the loss in totality is as a result of revaluation h components because the central bank is a victim of its own successes is coming from the revaluation losses. We are saying that oh there were uh you know assets that had a certain exchange rate and because the CD has appreciated if we revalue those asset in CD terms the value comes down. But if you look at the laws that the central bank posted in 2025 it comes in different components. We have the operational aspect of it which basically comes from the bank of Ghana's open market operations. That one has nothing to do with real >> open market operation is it not towards the the inflation managing the >> the open market operation is when the central bank decides that there's for instance excess liquidity in the system and the bank wants to mop up the excess liquidity to reduce the liquidity level such that uh there will be fewer or less money chasing goods. You understand when it happens like that is the boutique market and the macular market the differences. So when it happens like that then the prices will begin to drop and inflation will come down. That kind of operation has nothing to do with revaluation >> and that operation posted about 15.6 billion cities >> lost >> as loss. Okay. So >> what does the operation entail? I'll come to that but I just want to disagregate the components of the laws for you to know that when we say that a central bank is a victim of its own success that may not be entirely true >> and the other component of the loss is coming from the what we put into what we call the other comprehensive income.

[00:23:29]That is why the revaluation component comes in >> and if you look at the data the bank of Ghana put out the other comprehensive income loss okay was 19 billion out of the 19 billion only 9.5 billion of that is coming from revaluation the rest is not from revaluation so if you look at the totality of the loss as has been recognized by bank of Ghana and this evening the bank of Ghana has issued a statement on their website.

[00:24:00]>> Is it a Q&A? I'm just seeing >> the Q&A.

[00:24:02]>> Yeah.

[00:24:02]>> When the financial statement came out and those of us on the minority side said that the loss is more than 15 billion because what they have put out as 15.6 billion excludes the loss in the other comprehensive income. Our colleagues on the RD agree with us. This evening, the Bank of Ghana has put up Q&A on their website and in the first, second and third lines, one sentence, they have agreed that the other comprehensive laws are part of the of the of the total laws. So the 34 billion laws that we were talking about has been accepted by the Bank of Ghana this evening. So as I've said if you disagregate the laws and you want to see whether or not the central bank has become a victim of its own success you realize that out of the 34 billion laws that we are talking about only 10 9 billion of that 34 comes from revaluation. Okay 9 billion out of 34 if you start the percentage it cannot therefore be that the bank is a is a victim of its own success. Then if you look at this whole loss issue we are talking about one important issue in this whole discussion is the negative equity component equity.

[00:25:22]>> It is a serious matter but you see we are even focusing we are just visited on the loss. The bank of Ghana is in negative equity position.

[00:25:30]>> What does that mean? In in simple terms it it it means that in in as at the time the accounts was prepared if you value the bank of Ghana assets against its liabilities you know the liabilities will assay the assets >> including their head office >> that's as as as is prepared so that is a negative head office why not it means that the bank of Ghana had a certain equity position by the end of each financial year if the bank of Ghana makes losses it is from the equity the equity begins to drop begins to drop begins such that it hits zero and it gets into negative okay >> that's difficult to believe including the shareholdings in Ghana international >> that that is >> is that information from the bank >> yeah that is information from the bank that is what they negative equity position >> if let me come if it were a commercial bank >> we would have said that the commercial bank is bankrupt >> insolvent we come to insolveny >> that's different it's And this is also not capital adequacy ratio.

[00:26:33]>> It's obviously is different from the negative equity in a way >> and it's also different from capital adequacy ratio.

[00:26:38]>> I mean technically I mean so if you take the >> No, I'm I'm concerned because what you are saying is very serious.

[00:26:45]>> Let me dissect that one for you.

[00:26:47]>> But you're saying is smiling. It's not serious to you.

[00:26:49]>> It is very serious.

[00:26:50]>> It's really ser but but I didn't say that in any of the >> So I want to talk about the negative.

[00:26:55]>> Okay. Go ahead. talk about the insolveny and then let you know and let everybody accept MPP and this whether we like it or not. The Central Bank of Ghana is in a precarious situation. The Central Bank of Ghana today needs recapitalization.

[00:27:16]Paul, it's a serious matter. The bank needs recapitalization.

[00:27:19]>> I want to disbelieve you. No, >> I I'll come to you. I'll come to you.

[00:27:24]Let me just end or you happy for him to >> so I I I want to come up with a narrative on that. Do you agree with what he's saying?

[00:27:33]>> He has explained what a negative equity is.

[00:27:36]>> But the history of negative equity was that >> at a point when Ghana was going through a domestic uh uh what do you call it?

[00:27:44]>> Yes.

[00:27:44]>> Yeah.

[00:27:45]>> There was the need to close a financing gap. A gap that we needed to meet the the domestic debt restructuring for the fund to come in. The central bank had to save Ghana at that time by taking a hit of almost 50%.

[00:27:59]>> Of also just receiving his money >> precisely.

[00:28:01]>> So they didn't get their money.

[00:28:03]>> Precisely that instantly send the equity into negative.

[00:28:06]>> Was that not rescheduled that that debt is not canceled as far as the bank of Ghana is concerned? Can the individuals rescheduled?

[00:28:12]>> Yeah, that but this one was canceled. So that was what brought the negative equity.

[00:28:16]>> So the bank of Ghana has been in negative equity since then.

[00:28:19]>> Yes. Precisely. So it's a culumative thing. Yes. 2024.

[00:28:22]>> Yeah. Yeah. Yeah. 20. It was in 2023. I think so. 2022 or 2023 at the height of the uh domestic uh what do you call it dep crisis? Yes.

[00:28:32]>> So the then management of a central bank saved the country by taking a hit for the country for us to go onto the reform program for us to recover the economy.

[00:28:44]So it was it was a good thing that Ghana did but it sent uh balance sheets the central bank's balance sheet into negative equity.

[00:28:53]>> Right.

[00:28:53]>> So this negative that Dr. Gideon talks about is not new.

[00:28:56]>> No no no it started at that time. So but it's accumulated. So it's it's is it's >> Is it worse now?

[00:29:01]>> Yeah it's worse now.

[00:29:02]>> It's worse. It's worse now.

[00:29:03]>> But hold on. I'm interested in why is it getting worse? Yes. Because he made the point that even the losses were being recovered from 60 billion 30 billion then suddenly shooting >> anytime you make a loss at the end of the year it would it will reduce your equity to make it worse. So in 2023 if we added to the loss it was make going to make a negative equity worse. If 2024 we made a loss it was going to make it worse. If 2025 made a loss it was going to increase it.

[00:29:29]>> That is not correct. Now you see >> just just let me that is not correct in the sense that >> from 2023 to 2024 the negative equity reduced.

[00:29:40]>> Yes. But it was no there was a reduction in >> it's returned it started.

[00:29:46]>> So it's journeying back to positive.

[00:29:48]>> Exactly. It reduced to somewhere 50 something uh billion >> and now it has shot up to 98 billion.

[00:29:56]>> Yes. It's shot up.

[00:29:57]>> Okay. So from 2023 to 2024 although the bank made a loss albeit smaller relative to what it had made in 2025 >> the negative equity position reduced. So just as the loss was reducing from 2022 20 23 24 the previous government had also that negative was getting better was getting better >> but now it's all >> and that is why the governor when the when the president uh you know ushered the governor into office he made a firm promise to to president Muhammad I wish if you have that video >> we'll play it >> the governor said that one of his prime mandates is to make sure that the negative equity position is reversed.

[00:30:42]This was last year.

[00:30:44]>> The governor made that pledge to you saying he was unable to achieve that >> that he wants a negative equity position to reverse. It was on the path of reversal.

[00:30:54]>> Yes.

[00:30:54]>> Rather this time around we have seen it shot up to about 98 billion. Paul, let me you see you see this whole discussion about the central bank and if you look at the the two sides the majority of minority is to aortion blame. I did worse, you did better. For me, we should look at the central bank as a state institution that is set up to clean the mess that happens in the economy.

[00:31:20]There's not the bank of Ghana is every central bank is like like a fire service >> in economics. They are going to fight the fire when they don't cause the fire.

[00:31:29]So all of these say, "Oh, I did better, you did worse." But you see, what we need to know is that the crisis that hit Ghana required a central bank to step in, take the bullets and recover the economy.

[00:31:43]>> That has happened already.

[00:31:44]>> Precisely. No recovery generated.

[00:31:46]>> No, no, no. The recovery as at 1 January 2025, Ghana's economy are not fully recovered. Inflation was above 20%.

[00:31:53]>> Has it recovered now?

[00:31:54]>> Inflation is 3.2%. 2%. So let me talk.

[00:31:56]You see, we need to we need to give credit to the the policy choices that have been made from 2002 up to now.

[00:32:05]>> 2002.

[00:32:05]>> Yeah. Up to now. Yeah.

[00:32:08]>> No, 2022. I2 to now >> that over the four years the central bank has made conscious effort to fight inflation and get this economy on the path of >> it seems that it's back on the reversal.

[00:32:20]>> No, no, it's not back on the reversal.

[00:32:22]People are admitting that the negative equity has deepened.

[00:32:25]>> Yes, the negative has deepened the negative has deepened but at what benefit? Don't forget that in that benefit don't forget that in 20 2024 even though we had reduced inflation over 20%. The currency depreciated about 90%. And don't forget that when the currency depreciates the revaluation becomes positive on your assets and it comes to add to your income.

[00:32:50]>> Mhm. Oh the revalation because when currency depreciates you reval your asset it goes up it has your income. So if we are looking at the debate of the central bank as a central bank without political colors you find out that the cost of the greater stability that we've enjoyed in 2025 was going to come higher than the the stability that we enjoyed in 2024.

[00:33:11]>> Hold it there.

[00:33:12]>> Yes. I I agree with Prof. >> You agree that even Okay. I agree with proof that the central bank should at any material time be in a position to correct the mismatches in the economy.

[00:33:29]But you see once we are looking at benefits the cost at which that comes with should be important to all of us. This is not the first time we are stabilizing the Ghanaian economy and stability is relative. Today you may say you have done so well you've stabilized but it's quite relative because there are other things that need to be done. We stabilize this economy.

[00:33:59]Okay, relative terms using relative terms because we reduce inflation from 54% to 23%.

[00:34:10]That is a 31 percentage point reduction at a cost less than reduction of inflation from 3% 23% to 5% 18 point reduction.

[00:34:25]>> That the 18 point does it cost more?

[00:34:26]>> It's costing more. Well, could it be if you are gradients? Could it not be because you are getting into single days more difficult?

[00:34:34]>> No, I'm coming.

[00:34:35]>> So, you cannot say that a lower percentage point reduction in inflation should cost the country or the central bank higher than when there was a higher percentage point reduction.

[00:34:53]I don't that is the first point.

[00:34:56]Now even when we talk about exchange rate yes the city is around 10 point something on the market maybe let's say 12 people are happy but the cost at which it comes with it's mindboggling what's the cost we have thrown in about $10 billion okay last year through gold board and all of that the only thing that $10 billion was able to do for the exchange rate was a reduction from 14 to 12 on the market in 2024 when it reduced from 16 to 14 two cities difference from 14 to 12 two cities difference. It didn't have to take the central bank to inject $10 billion to achieve two city difference reduction.

[00:35:48]>> Hold on prof No, you hold it. Hold it. I'll come let you finish. So on that part of exchange rate reduction two city different two city different it's just that today how much we buy the dollar is lower than how much we used to buy it in 2020 at the end of 2020 >> which is positive for the economy >> which is positive for the economy but at what incidence at what cost why do we have to inject 10 billion citiz What else could have the 10 billion done?

[00:36:20]>> It could have done more IF SOMEBODY WAS ABLE to use let's say about $2 billion injection >> to reduce the price of the dollar relative to the city by two cities and you are using 10 billion you should be able to achieve MORE THAN THAT. THAT IS WHY I'M SAYING that >> is that 10 billion lost paying more for less.

[00:36:39]>> Where is the 10 billion? Is it lost? How come you >> nobody said it's lost but that's the intervention that has been made >> by the bank of Ghana.

[00:36:45]>> We are paying less. Yes, but but I'm asking you that if they needed to make that intervention and the money is not lost and they have made the intervention and it's good for everyone. I'm saying that we have committed more but the returns >> the returns >> is less that is what we should avert our minds to that is what is going to help us [laughter] to critically examine whether or not the path that the central bank is on is optimal because as for results you can get >> so you're saying that you you are worried that if we go on like this over the next two three budgets we're going to be in real trouble >> real trouble and if you Give me the time we will come there. What is the implication >> of everything that has been >> of these losses? Okay. To the taxpayer because at the end of the day at the end of the day going to pay the taxpayer keep that question. What's the implication to the taxpayer? Yes.

[00:37:39]>> Let let me come in. You see I keep on saying that it is not a matter of you did 10 I did two.

[00:37:45]>> But we can't run away from that. No, no, you we have to run away from that because we have political situation. We have to the central bank is Bank of Ghana. It is not NDC Bank of Ghana. It's not PPP Bank of Ghana. And that is where I come from.

[00:37:57]>> The central bank is an institution that has a mandate to ensure price stability to ensure financial stability and to ensure that they support growth in this economy. It doesn't matter whether it's PP or NDC in power. But if someone is not >> you cannot also carry out in economics in economics you cannot carry out exchange rate analysis by taking quantum >> what's what do you mean what do you say quantum you cannot say I reduce it by two you increase it by two so is >> circumstances that determine it depreciating rates that we talk about >> the rate at which is depreciating >> precisely I mean yeah precisely you need to talk about depreciation so you're talking about steming the if if I if if the city was four and you made it six and the CD is 20 and I made it 22 even though they are all two two they are not the same to use the rate of depreciation >> economic >> so the point no the point I'm making is that whatever happened in the past the the the the difficulty with which Ghana was trying to recover it economy was the exchange rate dimension we are fighting inflation we we reduce inflation and like Gideon said by half from 54 for to about 23 which was good. At that time the currency was still depreciating and itself was making it difficult for the central bank to fight inflation. So something extra had to be done for us to maintain that price stability for it to transfer into inflation for us to drop inflation in single digits.

[00:39:29]And if you like [clears throat] if you like take a survey of businesses in this country any business you and ask them what the stability in 2025 has brought to them. So whilst we are trying to fight inflation the city was still depreciating. Look at 19% in 2024.

[00:39:49]If the if if the central bank hadn't fought the the the depreciation of city to let it appreciate and the city even depreciated by 19%. The bank of Ghana's books would have looked very good.

[00:40:01]>> I'm I'm sorry. So go and take the counter and I've done that counterfactual. Go and take the counterfactual and let the city depreciate by 19%. And check the central bank's book. So, so you're saying that because becoming a difficult because the the currency was becoming a difficult battle, the Bank of Ghana had to do whatever it >> precisely to stabilize the country at whatever cost.

[00:40:21]>> We noticed from the at whatever cost.

[00:40:23]>> Precisely. We noticed from the braces at the NPC that the bit that was coming for the depreciation was being too persistent and if we are going to fight inflation, we had to do something about it.

[00:40:33]>> Something significant.

[00:40:34]>> Precisely.

[00:40:34]>> At whatever cost.

[00:40:36]>> Not at whatever cost. Paul look if if you sit down to estimate the benefits that the CD stability has brought to this country I'm not saying that we shouldn't talk about the cost but let's look at a broader picture and stop aortioning you did I did 10 you did two I did eight that is not the issue >> it is the central bankers it is the then I'll come to you on that land your point it is the central bank's mandate >> that the constitution has given the central bank for a central bank to meet that should be our focus. It is a public good.

[00:41:08]>> I've been hearing that I need to make profit. After all, this country loses a lot of money to corruption. Nobody talks about it. So if a central bank, we go to court, have you have you seen being retrieved? If a central bank is fighting the 600 million, go and talk to businessmen.

[00:41:23]>> The president said 600 million.

[00:41:25]>> Look, go and talk to businessmen >> and go and see. I'm an economist. I'm not talking for any party, but I'm saying that the stability that the city has brought to this economy, it's very refreshing. But a businessman will tell you that look now I don't go and hold my dollars because I want to import in 6 months time I go to the bank and the dollars are there and it is because of the intermediation that has brought that stability. Look Ghana needed the stability to build the resilience. We couldn't have had a depreciating city and be able to >> So you're saying that you're saying that whoever was at the central bank in 2025 would have had to take this.

[00:42:00]>> Precisely. It didn't matter which it didn't matter. So that the results that we are seeing today were were fat and complete. We going to have this >> the central bank that was doing his policy. Let's forget about this politicking thing because you look into the president. They did two. We did one.

[00:42:14]We did better than it doesn't really matter. [laughter] >> I wanted you to answer the question about the effects on the taxpayer.

[00:42:20]>> Well, it will be a great disservice to the country >> if we think that because we are getting results, we should not be concerned about the cost. That's what I said.

[00:42:33]>> I'm coming. I'm coming. Please. It will be a great service to what I said >> because at the end of the day, and I'll come to that, it is the Ghanaian people who are going to pay.

[00:42:42]>> So, what's the effect of the tax?

[00:42:43]>> What I'm saying is that we don't have to pay more for less. That is where the relativity comes in. Nobody Nobody Nobody is disputing the fact that stability in the currency is good for everybody.

[00:43:02]But could we have achieved more? That is the point.

[00:43:08]If if as a human institution and the development agenda, we can always achieve more.

[00:43:13]>> Paul, after spending injecting or intermediating the market with $10 billion, if we had uh things right, we should have been able to achieve more. And I stand by that. If if you go into the numbers, building to the argument of the handless of the of the central bank. You are suggesting that there are another group of people handled it better than this group of people. Is that a point you're making? That's really the point that Prof doesn't want to make.

[00:43:41]>> No, you can't run away from that.

[00:43:43]>> But he says we shouldn't do that because the central bank is why not?

[00:43:46]>> But you see when you look at the Ghana armed forces, we never say that my armed forces did Liberia.

[00:43:52]>> We talking about government of Ghana MPDC.

[00:43:55]>> Yes. But he's making the point about the central bank. We don't say that about the arc.

[00:43:59]>> The central bank is a central bank >> like the armed forces >> and the central bank works within a fiscal year.

[00:44:03]>> Yeah.

[00:44:04]>> If for a particular fiscal year the central bank was able to spend less to achieve more.

[00:44:11]>> What did he achieve please? I'm >> to achieve more.

[00:44:14]>> What did he achieve?

[00:44:15]>> It should not be acceptable >> that in a particular fiscal year we spend quadruple that >> to achieve less >> and achieve the same results.

[00:44:23]>> No no he didn't achieve the same result more and less.

[00:44:25]>> No no he didn't achieve the same result.

[00:44:26]So that is >> we we spend less we spend less to reduce inflation. The currency was too depreciated.

[00:44:32]>> Oh no he's making a point to my point the currency was so if you want to make a comparison then you go into the route of the comparison we find people are saying that the recent bank of Ghana interventions achieved a lower inflation and a lower currency. Yes.

[00:44:49]A lower national. He said that your intervention or the NPP's intervention, >> it's not NP's intervention. He said the central bank's intervention in 20212 did achieve lower inflation but it did not achieve a lower interest rate. So that when you say more and less what does it mean?

[00:45:05]>> Each one stand on its own.

[00:45:07]>> We have to analyze them as they are.

[00:45:09]Mhm.

[00:45:10]>> The inflation what brought the inflation to the single digit is the huge cost we are talking about now and I'm saying that you brought inflation from 23% to 5% 18 percentage point >> and the currency 14 >> no problem why for the first half of 2023 the city never depreciated >> 6 months >> yes in this country I'm telling you the data shows >> first half of 2023 there was never a depreciation of the city. Look, we have been here before >> in 2017. That's impressive. I'm coming.

[00:45:45]You agree with that?

[00:45:46]>> Come here, Paul. Let me build this.

[00:45:47]2017, 2018, 2019, the economy was on solid path >> single digit inflation for 24 months. We didn't incur this cost.

[00:45:58]>> I get it. I get it.

[00:45:59]>> So, Paul, let's get it because at that time, inflation was low.

[00:46:03]>> It cannot inflation. Go look at the central bank. was low because policy behavior.

[00:46:07]>> No, no. Go and look at the central bank's balance sheet >> and the central bank's balance sheet at the time was saying was positive.

[00:46:13]>> Hold on, hold on. 17, 18, 19.

[00:46:15]>> So, let us admit that we don't have to incur garanchual losses before the tax.

[00:46:26]>> So, this loss that we are talking about, >> the central bank needs recapitalization.

[00:46:32]How is the central bank going to do that? The government may have to step in where the central bank is now.

[00:46:40]Insolveny, negative equity to almost 100 billion cities. The bank needs recapitalization.

[00:46:46]The fiscal authority will have to come in and what they may have to do is to issue non-marketable bonds to the central bank. Now those bonds will have to be serviced. The interest okay will have to be serviced. And if the interest is to be serviced, they are going to be serviced from the budget. Once it is going to be serviced from the budget, it is you, me, the Ghanaian people who are going to pay true taxes over time. Let's accept that. Secondly, if the central bank wants to get to a positive equity position, the central bank may decide that for some years they will not pay dividends to government. It means that what is supposed to come to government >> as a shareholder >> as a shareholder will not come.

[00:47:32]Therefore the monies that you need for your roads will be cailed. You won't have it.

[00:47:37]>> Oh but they are doing big push.

[00:47:38]>> Oh please I'm coming. I'm coming.

[00:47:40]>> Okay. So so so that is going to affect the taxpayer also.

[00:47:45]Then again there is what you call the tradeoff okay between the central bank's balance sheet and the public financing because if government has to recapitalize the central bank where government is going to get the money from nobody knows but that money that is going to go into the recapitalization that is the plan the central bank has made you heard at saying that if the central bank needs recapitalization They should sell their headquarters >> because he's not going to recapitalize the bank.

[00:48:19]>> Oh, he said that they should sell the headquart.

[00:48:20]>> The finance minister has said it.

[00:48:21]>> He wasn't joking. I thought >> the finance minister doesn't joke like that. Okay. He said that the central bank needs recapitalization from the government and he is not going to recapitalize the central bank. If they need recapitalization, they should sell uh the headquarter. If they don't sell and the central bank eventually comes in to recapitalize whatever monies that the fiscal authority is going to take from the consolidated fund to recapitalize the central bank is the monies that must go into school feeding is the money that must go into healthcare. It is the money that must go into our education is the money that must finance our roads and all of that. So at the end of the day this huge losses we are talking about some of which were avoidable from the point of the central bank it is the Ghanaian people who are going to suffer at the end of the day and I'm saying some of them were avoidable because part of the cost especially on the side the open market operation is coming from the bank's own policy failures because when the previous government realized that the there was the need to finance the open market operations in the mopping up of excess liquidity to term inflation. Two main critical policies were introduced. The cash reserve ratio okay with the commercial banks the one on the city and the one on the dollar. They maintain the one on the city and made suggested that the one on the foreign exchange they have to revise it. What the previous government did was that because people were banks were paid DDP whatever it was not a pre it was not a decision of a previous government I was I'm a member of the MPC we made that decision >> so let's take the central bank from government and that's the point I'm keep on making >> you've been MPC through >> yeah you see Paul let me know I was there so let me make a correction of what he's saying >> there's no correction he made an error so error so let me tell you the error >> the decision decision we made about the dynamic CR was understand that >> so a dynamic CR said the the banks are supposed to keep reserves >> with with the central bank which is a normal practice right >> now we noticed that there was too much liquidity in the system the banks were also not giving credit to the private sector so we made a decision at that time that we're going to make the kind uh the cash reserve ratio dynamic in a sense that if Your loan to deposit ratio was above 50%. It means that the deposit you receive you've given out over 50% to credit.

[00:51:01]>> This commercial bank >> the commercial banks you are going to keep a cash reserve ratio of a lower level.

[00:51:06]>> Mhm.

[00:51:07]>> Now if it was between 50 and 40% you're going to keep a high level reserve ratio and then if it was below 40% you're going to keep even a much higher almost about 30%. I'm not too sure about the figures. The intention was at that time it was not a government decision. It was a central bank decision. That's the point I keep on making. It was done to try to make sure that the commercial banks were giving credits and not using their forex their their excess h cash to buy forex because that pressure was going to also lead to a dipation of the currency. So we said that look once you give more loans you hold less reserves because you intermediating. The idea was to ensure financial intermediation. That was why we did that. Now at that time the decision was that you because the forex was depreciating we didn't want to hold any of their forex deposits as reserves so they could use that to intermediate. So we take your foreign currency deposit we add it to your city currency deposit and then look at the loans and then we ask you to keep your reserves in cities so that we can mop up the liquidity in the cities and leave the dollars to be used for intermediation. Now in May 2025 after doing this policy for almost from 2024 to 2025 normally when policies like that are done as part of MPC process we go to the market to the banks to try to gauge the impact of the policy how they reacting to it. We have consumers at the banks reporting that when they go to deposit their foreign currency the banks reject them. You know why? Once he picks the deposit that ratio of loan to deposit will drop and it goes into the high band of the cash reserve ratio and the banks didn't want that and therefore when you go they tell you that go with your we are not accepting your forex meanwhile we needed the forex to come into the banking system for intermination. So he said look if we are holding the city's the single currency dynamic cash reserve ratio let them hold city for city dollar for dollar the dynamic the CR is still intact we've not done anything to that and it was because of the no and that he said was that we are changing liquidity into the systems >> no no >> so that that was the point I made injecting too much liquidity yes that's too little I No, he he doesn't understand the dynamic CR thing. He should go and he should go. No, no, no.

[00:53:31]He doesn't. He doesn't.

[00:53:32]>> No, no. With all due respect that you see.

[00:53:35]>> No, no, no. You see, no, >> you don't even let me land. Okay. Your point of order was on the error. I >> made wrapping up. So, let me land on the taxpayers effect and I'll come to you.

[00:53:46]>> Not the taxpayers effect. There's nothing that we have said on the is different from what we have said.

[00:53:52]>> I mean, there's no I don't understand respect.

[00:53:57]I'm not saying that >> I was you have two components of the dynamic cash reserve ratio >> the same >> that one is going to confuse my viewers who are not economist >> there is not two there are no two companies so there are dual currency and single currency >> we don't understand that component is it not two components foreign CURRENCY AND LOCAL CURRENCY is two components that is what I'm talking about it's two components >> the point you making >> what you maintained is a single currency >> yes they did >> then you reverse the dual currency one.

[00:54:26]Okay. I want Prof to tell me that the reversal of the dual currency dynamic cash reserve ratio did not lead to higher cost, higher OMO cost. It led to high the reversal. The reason why I led to hire >> so if I have cities the reason why I led to hire cost was that if I were a commercial bank and I had $100 and I had thousand CDs the dynamic cash reserve ratio applies a certain percentage on my thousand CDs depending on my loan to depo loan deposit ratio on your dollar okay what had been said is that on paper convert your dollar into cities Mhm.

[00:55:12]>> So that we apply that on your CD stock.

[00:55:15]>> Mhm.

[00:55:16]>> Not on your dollar stock.

[00:55:17]>> For the commercial banks.

[00:55:18]>> Exactly. Because >> between central bank and >> because the central bank wanted to mop up more of the cities.

[00:55:24]>> Okay. Good point.

[00:55:25]>> Unreunerated.

[00:55:27]>> Good point.

[00:55:27]>> Okay. So when you say I don't understand so that the central bank wanted to mock up more of the city >> take cities from people >> unreinated. So a certain portion of the cities will go to the central bank without THE CENTRAL BANK PAYING any interest on them.

[00:55:43]>> Which is buying cities.

[00:55:44]>> We all cities. All right.

[00:55:45]>> I give to a commercial.

[00:55:46]>> It's a policy. Okay.

[00:55:47]>> So I give my cities to Ghana commercial bank.

[00:55:49]>> The commercial bank I mean money is finible. The commercial bank take deposits from all kind.

[00:55:53]>> I get it. Yes. So I give >> and the commercial bank decides to participate in the market >> which is what >> of the central the open market operations. Okay. It's a bill which does what?

[00:56:02]>> It's a bill only commercial banks. It's done at the inter bank level. You cannot directly but particip interest rate if you bring the money to me thousand cities we pay interest on it but per the dynamic cash reserve ratio a certain percentage of the funds is given to bank of Ghana all remmonated bank of Ghana does not pay any interest on it >> so if you have thousand cities and a dynamic cash reserve ratio of 10% is applied Right? It means that 100 cities goes to the central bank and the central bank pays no interest on it.

[00:56:40]>> They pay the interest on the rest.

[00:56:41]>> The 90 cities if the 900 cities if you decide to take it back to government central bank they will pay interest.

[00:56:47]Some banks will also loan some to the private sector then you also have $100 in your vote. The central bank is saying that we still want to tap into your 900 cities remaining or whatever cities you have. So the $100 you have convert it on paper into cities. So if it is 10 to 100 that will be th00and and the central bank again will take 100 from that. So you realize that the central bank has 200 cities from you at their end without paying interest on that.

[00:57:18]>> Now when they reversed it, it means that the banks will then keep their $100 will not convert it on paper to cities for the central bank to take 100 cities unremonated. So the only amount of money that the central bank has taken from the commercial bank unreunated becomes 100.

[00:57:36]Any other thing that comes they will pay interest on it instead of having 200 free of charge. So that is why that is what that is that is what is contributing to the higher cost. Okay.

[00:57:48]It is not any you are saying that the $100 that you are talking about now if you go to dual currency he's going to keep also part of the $100 it's it reserve that will also not be eliminated. So it is not like the $100 is still there like that. You see Paul don't confuse OMO with CRO I don't think we are talking to impact they are two different impact on fractional reserve banking >> he is saying that the taxpayer is going to lose because at this rate the bank of Ghana needs to be helped. Now the money that they will help the bank of Ghana is the same amount of money that would have built school. Look, the government has to re catalyze the central bank cuz it's the government that caused the central bank to get the negative from but in doing so I'm coming I'm coming. It is the government that caused the central bank to get a negative. Fair enough.

[00:58:39]>> So it is fair that the government to come but the opportunity cost to the citizens of the government.

[00:58:44]>> Ah Paul >> if I'm a central bank >> I'm running efficiently.

[00:58:48]>> You come and cause my equity to go negative.

[00:58:51]>> Yes.

[00:58:51]>> And now you bad policy. No, I'm not saying it's a bad policy >> by gold board.

[00:58:56]>> No, that the domestic uh debt restructuring is what send the central bank into negative equity.

[00:59:02]>> Oh, the old one.

[00:59:03]>> Yeah, >> we are still added.

[00:59:05]>> So, the point I'm making is that if anybody has to solve the problem of the central bank, >> it is the person who sent the central bank cost. At what cost?

[00:59:14]>> Yes, but they have sent us to negative >> should ignore schools and recapitalize central bank. Look you see that that sort of analysis you have political >> no no that sort of analysis political and you know why I'm saying that okay let me ask you a question >> if a city depreciates and today a city is 20 cities for prices are sold at 50 cities a gallon >> and government is giving you school fees and all of that building roads for you are okay >> well I don't know >> if the government stabilizes prices and your standard of living improve your purchasing power improves and >> but I'm a teacher and I've not been paid in 14 months.

[00:59:49]>> It's not like your teacher has not been paid in 14 months. That not the issue that we are talking about. He's saying that >> electricity has gone up time.

[00:59:55]>> He's saying that if the government is going to solve the issues the central bank has, >> it will cost the the taxpayer.

[01:00:01]>> And the point I'm making is that is because you are you are you are you are not putting any value on what the monetary policy has done.

[01:00:10]>> The taxpayer must recognize that without these policies, it would have been worse off.

[01:00:13]>> Precisely. Let me let me give you one.

[01:00:15]The government itself >> is h government public debt was 60% of GDP.

[01:00:23]>> The stabilization of the city and the appreciation brought the public debt to 45% of GDP.

[01:00:28]>> Great.

[01:00:28]>> Do you know how much savings the government have made?

[01:00:30]>> Significant.

[01:00:31]>> The interest payment that the central bank has you should go and check the government budget in 2025. So you are saying that we can talk about losses but we should look AT WHAT THE >> BUSINESS DOES happen on the losses look at the benefits >> look at the benefits but I have a problem why do you have a problem >> I have a problem because look prof just mentioned debt to GDP ratio that has come down from 45 61 to 45 that is 16 percentage point decrease >> and it's coming at a huge cost >> there was a reduction in debt to GDP ratio from 92% to 61% % 31 percentage point decrease without such a huge cost.

[01:01:09]Look, prom doesn't like you to make the comparison on the political basic.

[01:01:16]You see, how do we not do that? If you don't do that, you wouldn't see where you see you are.

[01:01:23]>> You should have you should have listened to Gideon >> two years ago.

[01:01:27]>> You the media man, you don't have the discourse in this country. I'm telling you, you should have listened to No, you should have listened. Go and play those videos.

[01:01:35]>> I've been consistent in the the I'm coming. I've been consistent.

[01:01:39]>> Governor said that he was going to reduce the equity of the >> I said go and replay the video in 2023 just >> and listen to Gideon and listen to him now. No, I'm not going to say it. Go and listen to what the NDC said in 2023 and what they saying now. And that is why I'm saying politicians precisely when it comes to if we leave this discourse and we leave the politics out, you see that the central bank shouldn't take any blame. Isolate PP. isolate and this this is >> that's what he's crying for.

[01:02:05]>> No, just this is Ghana >> precisely.

[01:02:07]>> And the same Ghana has been able to do something achieve more with less cost.

[01:02:14]The same Ghana is doing the same thing achieving less with higher cost.

[01:02:18]>> When you say achieve MORE LOOK LET'S LOOK AT ACHIEVEMENT as that question.

[01:02:21]>> No no no forget about policy Paul let Paul let me come let's take the key performance indicators of central bank monetary policy. I beg you just give me just give me five minutes to do inflation there's inflation there's stability of the currency >> these two >> Mhm. Right.

[01:02:39]>> These are their core sort of res. Yes.

[01:02:41]So let's take these two apart from financial stability and let me tell you the reason why the dynamic CI was even changed was that when you hold those high reserves you take their cities you send a cost to them they are going to transfer the cost to interest rates at that time wanted lending rates to come down. So we didn't want them to transfer the cost. You can talk to any bank have come down.

[01:03:01]>> You have so let's let's talk about it.

[01:03:03]Look Paul, let's take only these two.

[01:03:06]>> Your point is that currency currency stability and low inflation. These are two. Let's take only these two.

[01:03:13]>> And these are the >> when I begin to do the comparison, >> then you should complete a comparison.

[01:03:19]Yes, you spend less, it cost less. You only brought down inflation. You couldn't stabilize the currency.

[01:03:25]Somebody has brought down inflation and has appreciated a currency. It's reduced our debt. It is reduced expenditure. The part of the reason why government expenditure the the the deficit was reduced was because interest payment on external debt reduced because of the appreciation of the currency and the stability that Ghana enjoys now is because of the central bank's uh policy in trying to use inflation and stabilizing the currency that is different from what happened in 2024.

[01:03:52]>> Fair enough. So, so, so Prof, we should have no questions about >> I didn't say we should have we should discuss the cost items and the central bank have to do something political lens >> that is my argument not that's why I said go back two years ago two years ago you understand what I'm talking about when you say political lens I find it difficult to appreciate what Paul provided to do isolate inflation currency that is what suits his argument okay it may favor a certain in political cause.

[01:04:24]>> I'm not saying anything before we understand to you. I'm saying you're a narrative and and you talk about debt to GDP and I'm pointing to you that the reduction in debt to GDP from 61% to 45%.

[01:04:39]cannot be said to be a super pererformance because the same country relative to the period you're talking about reduced that GDP from 92% to 61% a 31 PERCENTAGE POINT DECREASE WITHOUT the cost that you're talking about let's let's situate the argument within that context then also we are talking about saving the country by the central bank is that not it >> it means we want the central bank to be there all the time >> to do that work >> to do that work >> yet This same central bank that we want to exist in perpetuity to do that work.

[01:05:12]We had virtually run the central bank account.

[01:05:15]>> Who did not >> you see that is you see who did >> it is not true.

[01:05:19]>> Go and look at the financials.

[01:05:21]>> The central bank as at September October he says that you are trying to say a certain group of people manage the central bank better. He doesn't want you.

[01:05:29]>> I'm talking about 2025. The central bank as September October 2025 was insolvent.

[01:05:36]>> It's not true. That's [laughter] what the report is showing.

[01:05:38]>> No, no, the report doesn't say that.

[01:05:39]It's not true.

[01:05:41]>> Do you know what policy mean? So, let me ask, we have run out of time. Let me finish there.

[01:05:46]>> The central bank was policy insolvent.

[01:05:48]>> Central Bank of Ghana has never been policy in solvent.

[01:05:51]>> Okay. Well, I've seen that.

[01:05:52]>> It is not there. Go and check the financial. It is not there.

[01:05:55]>> Okay, please you finish. You central bank was not policy insolvent >> in terms of accounting insolveny. It's already insolvent because of the negative equity for policy.

[01:06:03]>> That is fine. Policy >> accounting insolveny. Yes, >> the central bank is already insolvent in accounting terms >> on policy insolvent. It had to take the magic wand of the sale of the 18 tons of gold for the central bank to be solved >> for his b is a sale of the gold and the reason why yes the reason why that is so critical prof knows why prof why is it that when we are computing our primary balance the IMF does not allow us to include a oneoff revenue in the primary balance because that is not your normal recurring uh income but This one is a normal. This one is normal. It is not normal. Must they continue to do it?

[01:06:44]It's normal. It is not. Let me tell you why. Let me tell you. Let me tell you why. Please let him finish your comments.

[01:06:49]>> Your reserves. I'll give you the last when the central bank sold the gold at the time and we questioned it. They said, "Oh, we are using it to shore up our reserves." Is that not the argument they made today? Their own financials has exposed that that that falsehood that they did not use that to show the the the results but rather they use it to increase THEIR INCOME POSITION IN ORDER for them not to be insolvent is going to be insolvent. So the central bank that we want to exist >> to save us we should not kill it.

[01:07:26]>> Okay. If your actions and your practices are such that your savior is going to die then you have no life.

[01:07:33]>> The central bank of policy is sovereign when when you say central policy is solvent what you mean is that >> the operating income of the central bank should be able to fund all it monetary policy actions. Okay.

[01:07:48]>> Failure of that >> I'm coming then it becomes insolvent. So I'm coming to that. Now the operating where does the operating income from the central bank comes from? It comes from fees and commissions. It comes from interest on instruments that you hold.

[01:08:00]It comes from investment of it reserves.

[01:08:04]>> Mhm. Mhm. [clears throat] >> And making profit. So if I have reserves and I can sell my reserves for money to add to my income, it is stated clearly.

[01:08:14]>> Why doesn't the IMF allow you to compute it?

[01:08:17]>> Compute what?

[01:08:17]>> He said the IMF doesn't >> No, no, no. He's talking about something different. He's talking about revenue.

[01:08:22]I'm talking about why revenue one off.

[01:08:26]So you are saying that revenue falling on your assets.

[01:08:30]>> You have reserves that are keeping in gold and then in in in money >> you can invest it in any. So tomorrow we may have to sell the headquarters of the central bank to victim.