The Centre for Economic Research and Policy Analysis (CERPA) has warned that the Bank of Ghana’s (BoG) increasing losses risk its independence and credibility. These losses largely stem from the central bank’s policy interventions and its exposure to government debt. This situation raises serious concerns about the BoG’s long-term financial stability.
CERPA’s policy analysis, reviewing the BoG’s financial performance from 2018 to 2025, found the central bank has moved beyond its traditional responsibilities. It has become deeply involved in government financing and quasi-fiscal programmes. This shift is blurring the lines between monetary policy, managed by the BoG, and fiscal policy, handled by the Ministry of Finance.
Ghana’s economy has recently faced challenges, including persistent inflation, high interest rates, and exchange rate pressures. The BoG’s financial health is under scrutiny amidst these economic difficulties. A weakened central bank could undermine public confidence in Ghana's overall economic management.
CERPA stated, “The heavy exposure to government debt and involvement in quasi-fiscal operations indicates a shift beyond traditional central banking roles.” This involvement creates a fiscal-monetary interdependence. This could compromise the Bank of Ghana’s operational independence.
The continued losses could weaken the central bank's financial strength and force the government to provide financial support. Such a recapitalisation by the government would further intertwine fiscal and monetary authorities. It could erode the BoG's ability to act independently in setting monetary policy. This situation also creates a precedent for future interventions.
To address these risks, CERPA proposes a structured strategy to rebuild the Bank of Ghana's capital. This could involve issuing long-term government bonds or direct budget support from the government. The think tank also called for a clearer separation of duties between the government and the central bank. Additionally, CERPA recommended that the BoG gradually stop its quasi-fiscal programmes or transfer them entirely to the Ministry of Finance. This would allow the central bank to focus solely on its core mandate of maintaining price stability. Such reforms are urgent to prevent the BoG's financial position from becoming a major source of economic vulnerability.