By Korsi DZOKOTO
The Bank of Ghana (BoG) is set to inaugurate its new $250 million headquarters, a development that has sparked widespread debate. While the building may signify progress to some, its timing and associated costs raise serious questions about the priorities of Ghana’s central bank.
This article argues that the decision to invest in this new head office reflects a misalignment with the bank’s core mandate, especially given Ghana’s current economic landscape.
Background to the new head office
The new corporate head office, scheduled for opening, has been a focal point of public scrutiny. Originally budgeted at US$81.8 million, the project’s cost has jumped to an estimated US$250 million, raising significant concerns about transparency, governance, and accountability. Despite widespread public concern, the BoG’s responses to queries about the project’s expenses have been minimal, fuelling suspicions of fiscal mismanagement and lack of accountability.
The project’s rapid escalation—from US$81.8 million to US$121 million within eight months, now projected to exceed US$250 million—has prompted serious questions. Key among them are: How did the budget triple in such a short period? What internal controls were in place to monitor these costs? Compounding these concerns, the BoG has declined to provide the current total cost, full procurement details, leaving the public with limited information.
Documents show that the procurement process began in January 2020, with the BoG obtaining approval to use a restricted tendering method. This approach, usually reserved for situations with limited supplier availability, restricts open competition, raising questions about compliance with Ghana’s Public Procurement Act of 2003, which mandates open tendering for major projects to ensure fairness and value for taxpayer money.
The BoG’s choice of five shortlisted companies for the project—including Ronesans Holdings, an entity not registered with Ghana’s Registrar of Companies—further clouds the process, with questions around how these firms were selected and why reputable Ghanaian companies were excluded from consideration.
Concerns over procurement extend to the project’s management as well. The BoG awarded a single-sourced, US$3.45 million contract to MULTICAD for project management. Public Procurement Authority records indicate that approval for MULTICAD’s contract was granted in September 2021, despite the company only being officially registered in December 2021—three months after approval. This discrepancy prompts further questions: Why was this no-bid contract awarded, and how did an unregistered company qualify for such a crucial project?
As the new head office nears completion and occupation, these unresolved issues surrounding cost and procurement cast a shadow over its impending commissioning. The Bank of Ghana’s allocation of substantial funds to a project that has tripled in budget without full transparency reflects a deviation from the principles of financial prudence and public accountability.
At a time when the BoG is charged with safeguarding Ghana’s financial stability, the opaque handling of this project’s budget and procurement processes underscores a governance crisis that warrants careful examination. The public is left wondering: How did a project initially budgeted at US$81.8 million evolve into one of the most costly developments in the bank’s history? And what, if any, measures will be taken to ensure accountability?
The financial state of the Bank of Ghana (BoG) has deteriorated alarmingly in recent years, raising critical questions about its priorities, particularly in the context of its decision to invest over $250 million in a new corporate head office.
Following successive losses of GHS 1.64 billion and GHS 793 million in 2017 and 2018, the BoG’s financial situation worsened significantly, with unprecedented losses of GHS 60.8 billion in 2022 and GHS 10.5 billion in 2023. These cumulative losses have left the BoG technically insolvent, struggling to meet its capital adequacy requirements and unable to sustain its financial obligations without external support.
To address this crisis, the BoG has signed a Memorandum of Understanding (MoU) with the International Monetary Fund (IMF), committing to early recapitalization as part of Ghana’s broader economic stabilization program. However, the central bank’s reliance on the Government of Ghana for recapitalization creates a major challenge.
The government, already heavily debt-burdened, lacks the fiscal capacity to inject the substantial capital needed to stabilize the BoG. This financial interdependency underscores a paradox: the institution tasked with ensuring monetary stability and supporting the financial sector now depends on a financially distressed government to shore up its operations.
Compounding these concerns is the BoG’s decision to allocate over $250 million to a new head office project, even as it grapples with insolvency. This extravagant expenditure raises serious questions about the bank’s fiscal priorities and its commitment to prudent financial management.
How can a central bank facing a capital crisis justify such a significant investment in infrastructure when those resources could have been directed toward recapitalization or strengthening Ghana’s fragile financial sector? The decision suggests a troubling misalignment between the bank’s financial realities and its spending priorities, further eroding public confidence in its leadership.
The consequences of the BoG’s insolvency extend beyond its balance sheet. A financially weakened central bank undermines trust in its ability to implement effective monetary policy, maintain financial sector stability, and support economic recovery efforts. The investment in a costly new head office amid this financial crisis magnifies public concerns about governance failures and misplaced priorities within the BoG.
While recapitalization may temporarily address the BoG’s financial deficiencies, it is clear that structural reforms are needed to restore credibility and ensure sustainable financial management. Transparency, accountability, and a re-evaluation of spending priorities must be central to these reforms.
The decision to prioritize an infrastructure project during a period of insolvency must serve as a cautionary tale, prompting a shift toward more prudent and responsible management of Ghana’s central bank. The cumulative GHS 66 billion loss made under this board since 2017 has not only weakened the bank’s balance sheet but also reflects a missed opportunity to address the critical needs of the struggling financial sector.
Operational inefficiencies
The BoG’s decision to spend over $50 million on renovating its existing headquarters, only to abandon it for a new building, further exemplifies governance inconsistencies. Renovations in 2019 and 2023 improved areas like the banking hall and visitor facilities, implying that the bank intended to continue using the site.
However, it later justified the new project by citing seismic safety concerns, raising questions about foresight in planning and resource allocation. If structural integrity was a known issue, why proceed with expensive renovations only to abandon them? This pattern of spending and then discarding points to operational inefficiencies and raises legitimate concerns about the bank’s governance practices.
Environmental and social responsibility concerns
The environmental impact of the new headquarters also warrants consideration. The building is located in a high-density area surrounded by other office buildings, which may lead to significant increases in daily traffic and, consequently, carbon emissions. Hundreds of BoG employees will commute to the new site each day, adding to urban congestion and negatively impacting the local environment.
In light of global efforts toward sustainable development, the BoG’s lack of emphasis on environmental considerations in its new headquarters project reflects a missed opportunity to demonstrate environmental leadership.
A central bank has a responsibility not only to uphold fiscal and monetary stability but also to model socially responsible behaviour, including environmental stewardship. Opting for a more sustainable, environmentally friendly design or location could have aligned the bank’s actions with broader sustainability goals, reinforcing its commitment to both economic and social responsibilities.
A legacy of misguided investment
In summary, to restore its reputation and uphold public trust, the BoG must reassess its approach to resource allocation and refocus on initiatives that support economic stability and social welfare. Going forward, the BoG’s board and leadership should prioritize transparency, fiscal discipline, and sustainability. By realigning with these principles, the Bank of Ghana can work to rebuild public confidence and demonstrate a true commitment to serving Ghana’s long-term financial needs.
