The Bank of Ghana (BoG) reported significant accounting losses for 2025, including a comprehensive loss of GH¢34.95 billion. The central bank stated it remains "policy solvent" despite these financial figures.
The BoG's financial statements reveal a net operating loss of GH¢15.63 billion. This has led to a deepening negative equity position, which has raised public concerns about the institution's financial well-being and its ability to carry out monetary policy.
The Bank of Ghana's financial performance in 2025 is a key point of discussion in Ghana's economic landscape. Large deficits can weaken a central bank's credibility and increase reliance on government support. This situation comes at a time when Ghana continues to navigate economic recovery efforts.
Dr. Dennis Nsafoah, an economics professor, noted that central banks should not be judged solely on accounting profits. "Unlike commercial banks, central banks exist primarily to maintain macroeconomic stability," he stated. However, he expressed disagreement with the BoG's method of demonstrating policy solvency. "Once these one-time gains are excluded, the Bank’s own accounting framework shows that recurring operating income was insufficient to fully cover recurring monetary policy implementation costs," Nsafoah explained.
The BoG's claim of policy solvency appears to depend on realized gains from the sale of gold reserves, which amounted to GH¢9.57 billion in 2025. Without these gains, recurring income may not cover ongoing policy costs. This raises concerns about the sustainability of the BoG's operational capacity. The true test of policy solvency lies in macroeconomic outcomes and the central bank's ability to maintain stability.
Persistent accounting losses can undermine public trust in a central bank. They might also complicate future needs for recapitalization, meaning infusion of fresh capital. The BoG's financial health impacts its ability to control inflation and maintain the stability of the Ghanaian currency, the cedi. These factors are crucial for foreign investment and overall economic growth.
The Bank of Ghana reported operating income of GH¢22.23 billion. The cost of its Open Market Operations (OMO), a tool used to manage money supply, was GH¢16.73 billion. Based on these figures, the bank declared a policy solvency of GH¢5.50 billion. However, a closer look reveals that much of the operating income came from selling gold reserves. This suggests that the bank is using its assets to cover its expenses. Experts argue that this is not a sustainable strategy for a central bank.
The concept of "policy solvency" is central to this debate. It means a central bank is capable of performing its functions, regardless of accounting profits or losses. This capability is measured by its ability to implement monetary policy effectively and credibly. Global central banks have sometimes faced negative equity. However, they have continued to control monetary policy and maintain confidence from the public.
The Bank of Ghana's financial situation warrants close monitoring. Investors and economists will be watching how the bank manages its reserves and its overall financial strategy. The continued ability of the BoG to effectively conduct monetary policy is vital for Ghana's economic stability and future development. The recent report highlights the tension between accounting realities and policy objectives in central banking. Future reports will reveal if the bank can achieve sustainable financial health alongside its mandate.