Introduction

On behalf of the Board of Directors, I am pleased to
present to you, the Annual Report and Financial Statements
of the bank for the financial year ended December 31,
2023. Over the past 12 months, we have confronted the
interlocking challenges facing our world. It has been a
year of economic uncertainty, with the banking sector
facing arguably the biggest macroeconomic challenges
of the modern era. Despite these external obstacles, the
progress we have made at CalBank, as detailed in this
report, is more impressive, albeit fraught with a significant
downgrade in our credit portfolio, mainly from one single
large exposure.


In 2023, we run the final lap of our medium term
ExCITeD 23 strategy which was rolled out in 2021. This
strategy, focused on leveraging the value, capabilities and
resources that exist within the bank, and amounted to
a comprehensive organisational transformation through
2021-2023. Specifically, in 2023, we took steps to
strengthen our governance model, put in place structures
to support performance management and reduced the
complexity of our organisational structure to drive the
business efficiently and effectively.


Economic Review

On 17 May 2023, the government of Ghana secured an
IMF Executive Board approval for a US$ 3billion 3 years’
Extended Credit Facility (ECF) arrangement to support
Ghana’s post-COVID economic recovery programme. As
an open economy, Ghana is largely dependent on the
export of primary goods such as cocoa, gold and oil,
making the country vulnerable to price fluctuations of
these internationally traded commodities. This resulted in
sustained high inflation throughout the first seven months
of 2023. This in turn led to high interest rates as the
Central Bank continued its monetary tightening stance to
curtail rising inflation. The country saw inflation easing in
the last quarter of 2023, declining from 53.6% in January
to 23.2% by December. The observed decline in inflation
was broad-based, with a stronger easing of food price
pressures and the sustained easing of non-food price
pressures, a trend we expect will be continue throughout
2024.

Real GDP growth came in at 2% in the third quarter
of 2023, spurred by the services and agriculture sectors.
The observed growth outturn was largely driven by the
ongoing frontloaded fiscal consolidation measures and
tighter monetary policy to correct fiscal imbalance and
rein in inflation. Throughout 2023, fixed investment was a
drag on economic growth due to weaker access to credit,
subdued foreign direct investment inflows and public
capital expenditure cuts as the government pursued fiscal
consolidation under Ghana’s new IMF programme.

The Ghana cedi depreciated by 20% in January 2023 and
has remained generally stable since then, with a cumulative
depreciation of 2.5% between February and September
2023. This was on the back of improved foreign exchange
supply, including IMF flows, which increased reserve
buffers, weak market demand owing to lower import bills
and purchases of repatriated export proceeds from mining
companies and oil and gas producers.

On the fiscal front, thanks to the Domestic Debt Exchange
Programme, Ghana’s debt service reduced by GHS52
billion in 2023 (6% of estimated 2023 GDP or 39%
of estimated 2023 revenue and grants). Fiscal policies
remained consistent with the IMF-supported programme
as the government made efforts to safeguard the revenueled
fiscal adjustment programme.