Central Bank losses during periods of tight monetary policy are not unusual and the scale of it highlights the true financial cost of policy choices made in response to a country’s economic crisis.
The Bank of Ghana (BoG) has posted a GH¢15.63 billion loss for the 2025 financial year. This is a sharp deterioration from the GH¢9.49 billion loss recorded in 2024. The roughly 65% year-on-year increase comes at a time when key macroeconomic indicators particularly inflation and exchange rate volatility have stabilised.
Consequently, the balance sheet of the Bank has weakened further, with negative equity widening to GH¢93.82 billion. Despite this, the central bank maintains that it remains policy solvent, meaning it can continue to implement monetary policy effectively without requiring immediate fiscal support. In practical terms, while the Bank may be technically insolvent on paper, it retains operational capacity to stabilise the economy.
Ghana’s macroeconomic indicators have shown a marked turnaround. Inflation has declined for 13 consecutive months to 3.2% as of March 2026 and this its lowest level since the country formally adopted an inflation-targeting framework under the Bank of Ghana.
The Ghana cedi has staged a strong recovery having appreciated 40.7% against the US dollar and 30.9% against the British pound. This has also contributed to a GH¢82.1 billion reduction in nominal debt which has eased pressure on public finances.
There has significant improvement in external buffers and financing conditions. Ghana’s gross international reserves increased from $9.1 billion to $13.8 billion and have since reached $14.5 billion – equivalent to about 5.8 months of import cover.
On the domestic front, monetary easing has begun to take hold, with the policy rate cut sharply from 28% to 18%, and further to 14% by March 2026, while lending rates have declined from 30.25% to 20.45% and further to 17.7%.
By the way, this is just data to contextualise the transition from aggressive stabilisation to a more growth-supportive policy environment.
Pressures behind the losses
First factor responsible for the 2025 loss is the soaring cost of monetary policy implementation, particularly through Open Market Operations (OMO). The central bank spent GH¢16.73 billion in 2025 to sterilise excess liquidity almost double the estimated GH¢8–9 billion recorded the previous year.
This signals an aggressive effort to contain inflation and support the cedi by withdrawing excess cash from the financial system. However, such operations require the issuance of high-yield instruments to commercial banks, effectively forcing the Bank to pay a premium to enforce monetary discipline.
Compounding this is the lingering impact of Ghana’s Domestic Debt Exchange Programme (DDEP). While the restructuring helped restore fiscal sustainability, it significantly reduced returns on government securities held by the central bank. The result is a structural imbalance: declining asset income alongside rising policy costs.
The high interest rate environment has further amplified these pressures. Elevated rates increase the cost of borrowing and sterilisation, creating a cycle in which the very tools used to stabilise the economy also deepen financial losses.
Additionally, exchange rate movements and revaluation effects particularly on foreign reserves and gold holdings contributed to the loss position. Although many of these are accounting-driven rather than cash losses, they nonetheless weigh heavily on reported financial performance.
Gold strategy and recapitalisation plan
Under its Domestic Gold Purchase Programme, BoG recorded a GH¢9.57 billion net gain, accumulating approximately 2.9 million ounces of gold. Without this intervention, the losses could have exceeded an GH¢25 billion.
The programme has evolved into one of Ghana’s reserve management framework. The central bank has been able to strengthen foreign exchange buffers while reducing pressure on the currency market by sourcing gold domestically and converting it into reserve assets. This approach has also improved confidence in the BoG’s external position and policy framework.
Operationally, the Bank generated GH¢22.23 billion in income. This translated into a GH¢5.50 billion surplus after sterilisation costs, a significant improvement from the modest surplus recorded in previous years. This indicates that underlying operations remain viable, even as impairment and policy costs drive headline losses.
External auditors, KPMG, issued an unqualified opinion on the accounts but flagged investment impairments and provisioning risks as key concerns. The Bank currently holds GH¢116.42 billion in investments, with GH¢17.26 billion set aside for potential credit losses, highlighting ongoing vulnerabilities within its asset portfolio.
To address its weakened balance sheet, BoG and the government have agreed on a phased recapitalisation plan from 2026 to 2032. This will involve capital injections either in cash or financial instruments to gradually restore positive equity.
Again, the Bank of Ghana (Amendment) Act, 2025 has raised the minimum capital requirement from GH¢10 million to GH¢1 billion, signalling a stronger regulatory foundation for future resilience.
What next?
If you analyse the 2025 financial statement, one of the fundamental questions you may ask is whether the current trajectory of losses is sound even if justified in the short term. There is little doubt that BoG’s aggressive policy stance has contributed to declining inflation, improved exchange rate stability and a more predictable macroeconomic environment. In that sense, the losses can be interpreted as the price of stabilisation.
However, there are also concerns about the efficiency and long-term implications of these policy choices. The heavy reliance on high-cost OMO instruments suggests limited deployment of alternative liquidity management tools. Moreover, persistent losses risk creating fiscal spillovers, as eventual recapitalisation will likely require public resources.
There is also the issue of perception. While sector players may view central bank losses as a function of policy trade-offs, the broader public and financial markets may interpret them as signs of institutional weakness. Maintaining credibility will therefore depend not only on policy outcomes but also on clear communication and transparency.
The Bank projects a return to profitability between 2026 and 2030 which will be driven by expected declines in interest rates, moderation in sterilisation costs and a stronger income base.
Yet this outlook is contingent on several factors, including sustained disinflation, exchange rate stability and timely execution of the recapitalisation plan.
There are still risks. Persistent inflationary pressures, renewed currency volatility or even delays in fiscal support could prolong the current cycle of losses. At the same time, structural challenges such as weak asset yields and high policy transmission costs will need to be addressed to ensure lasting financial sustainability.
Conclusion
The Bank of Ghana’s 2025 financial performance show a fundamental tension between economic stabilisation and institutional balance sheet strength. The losses are, in many respects, the inevitable consequence of decisive action taken to restore macroeconomic stability after a period of severe disruption.
Yet, while justified in the short term, taming it will require a careful recalibration. A recalibration that safeguards the gains in inflation control and currency stability while gradually reducing the financial burden of policy implementation.
Suffice to say, the credibility of the Bank of Ghana will hinge not on whether it incurred losses during a crisis, but on how effectively it transitions from stabilisation to sustainable financial recovery.