Bank of Ghana shows GHS 15.63 Billion Operating Loss

Dr. Dennis Nsafoah argues central bank is 'policy insolvent' under its own accounting framework despite gains from gold sales.

The Bank of Ghana reported a net operating loss of GHS 15.63 billion and a comprehensive loss of GHS 34.95 billion in its 2025 Financial Report. This significant financial deterioration also deepened the central bank's negative equity position. Dr. Dennis Nsafoah, an Assistant Professor of Economics at Niagara University in New York, agrees with the Bank of Ghana’s view that accounting losses alone do not fully define a central bank’s financial health. He argues that central banks, unlike commercial banks, focus on maintaining economic stability. They prioritize price stability, controlling inflation, and building monetary credibility. Their primary goal is not to generate profits. However, Dr. Nsafoah disagrees with the Bank of Ghana's claim of policy solvency using its 2025 calculations. He points out that the bank’s stated positive policy solvency relied heavily on one-time gains from selling gold reserves. Excluding these gains reveals that the bank's regular operating income could not cover its ongoing monetary policy costs. This means, under its own accounting rules, the central bank is 'policy insolvent'. Policy insolvency refers to a central bank's inability to effectively implement credible stabilization policies due to financial constraints. Dr. Nsafoah wrote an article titled “Large accounting losses, but is the Bank of Ghana truly policy solvent?”. He emphasized that assessing a central bank's health should involve more than just narrow accounting figures. He believes policy solvency should be judged by macroeconomic outcomes. This includes the central bank’s ability to sustainably maintain monetary and economic stability in the country. The Bank of Ghana’s reported figures clearly show a substantial accounting deterioration in its balance sheet. Dr. Nsafoah highlights that these losses cannot be ignored. Persistent accounting losses can damage institutional credibility. They can also increase reliance on government funding. Furthermore, these losses complicate recapitalization efforts and reduce confidence in the central bank's long-term financial position. Therefore, the Bank’s accounting losses are both real and significant for Ghana’s economy. These financial challenges demand close monitoring by economic stakeholders. Policy makers must consider how these losses impact future monetary policy decisions. The Bank of Ghana may need to explore different strategies to strengthen its financial standing. This will ensure its continued ability to stabilize the Ghanaian economy. The credibility of the central bank is crucial for both domestic and international investors.

Bank of Ghana shows GHS 15.63 Billion Operating Loss

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