Ghana: We Have Enough Reserve Buffers to Support the Economy - BoG Governor

29 November 2023

The Bank of Ghana (BoG) has enough reserve buffers to support the economy until the second tranche of $600 million balance of payment support from the International Monetary Fund (IMF) is released to the country, the Governor, Dr Ernest Addison, has stated.

He explained that he was hopeful the government would complete negotiations with bilateral and commercial creditors before the end of the year to enable the IMF release the second tranche of the balance of payment support under the Ghana's three-year Extended Credit Facility with the Fund.

Dr Addison disclosed this yesterday in response to a question on thepossible impact thedelay in release of the second

tranche of the IMF funds would have on theGhanaian economyduring a press conference after the 115th regular meeting of the Monetary Policy Committee (MPC) ofBoG.

He said the briefing he had received indicated that there had been fruitful discussions between the government and its commercial and bilateral partners.

The Governor expressed the hope Ghana would not get to the situation of Zambia and conclude talks with its commercial and bilateral creditors before the end of the year.

Dr Addison said inthe unlikely event that the second tranche was not disbursed before the end of the year, the country had enough buffers to last for six months.

He said the BoG through the Gold for Oil and Gold for Reserves Programmes and previous inflows from the IMF had helped bolstered the reserves of the BoG.

Dr Addison said the country's Gross International Reserves, excluding pledged assets and petroleum funds, reflected a build-up in reserves.

The level of reserves, as defined under the IMF-supported programme, he said, increased to $2.5 billion (equivalent to 1.1 months of import cover) at the end of October 2023, from the December 2022 position of $1.5 billion (0.6 month of import cover).

"This indicates a build-up of about $1.0 billion, mainly driven by the gold for reserves programme," the Governor stated.

He said the BoG had bought additional 35 tonnes of gold this year to shore up its gold reserves.

The Governor said the expected inflows from the cocoa syndicated loan would help boost the forex earnings.

Touching on the negative equity position of the bank, Dr Addison said BoG would not float bonds to recapitalise the bank, adding that the government would have to capitalise the BoG.

Dr Addison said the BoG suffered impairment of about GH¢54 billion due to the Domestic Debt Exchange Programme.

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