Bank of Ghana’s Losses Raise Questions in Parliament

Sterilisation costs nearly doubled in a non-crisis year, pushing the central bank’s losses to the second-largest in its post-redenomination history. The orthodox defence, that disinflation costs money, has international company. Whether Ghana’s losses fit that orthodoxy is now Parliament’s question.

The Bank of Ghana closed 2025 with a net loss of GH¢15.63 billion, the second-largest in its post-redenomination history and a 65 per cent deepening on the GH¢9.49 billion shortfall recorded the year before. Group negative equity widened from GH¢58.62 billion to GH¢93.82 billion. A separate accounting charge of GH¢19.32 billion in other comprehensive income, driven by the cedi’s appreciation against foreign-denominated assets, pushed the comprehensive loss, on the Minority’s reading of the books, closer to GH¢34.9 billion.

The headline figure is uncomfortable. Yet, as Governor Johnson Pandit Asiama and the parliamentary Majority have pressed the public to accept, a central bank is not a profit centre. Its income statement is a derivative of its policy choices. On that test, 2025 was an unambiguously productive year for monetary policy: headline inflation fell by roughly 18 percentage points, the cedi strengthened, gross international reserves were rebuilt, and the policy rate was eventually trimmed from 18 per cent to 15.5 per cent. The argument from the Sixth Floor of One Thorpe Road is straightforward, the bigger the work, the bigger the bill.

That argument has international company. It is also, on closer inspection, only partly the right argument for Ghana.

The orthodoxy of central bank losses

The case for treating central bank losses as a feature rather than a bug of disinflation is well rehearsed in the global literature. The Federal Reserve booked unrealised losses running into hundreds of billions of dollars in both 2023 and 2024 and remains in a state its accounting framework politely calls a “deferred asset.” The Swiss National Bank reported a record CHF132 billion losses in 2022, the largest in its 115-year history.

The European Central Bank, the Deutsche Bundesbank and the Bank of England have all suspended remittances to their treasuries as the cost of paying interest on commercial banks’ reserves overtook the yield on legacy bond portfolios. The Czech National Bank, frequently invoked as the textbook precedent, has spent close to two decades in negative equity without forfeiting a measurable ounce of policy credibility.

The economics, as the Bank for International Settlements and the Centre for Economic Policy Research have repeatedly argued, are unambiguous in one direction. A central bank cannot, in its own currency, become bankrupt. It can issue liabilities indefinitely. Negative equity does not, on its own, impair the conduct of monetary policy. What matters is what the literature now calls policy solvency, the capacity of the central bank to fund its own monetary operations from its own income, without recourse to monetisation or fiscal subsidy. On that metric, the Bank of Ghana’s position improved sharply last year, with policy solvency rising from GH¢793.54 million in 2024 to GH¢5.50 billion in 2025. The Bank can, in other words, pay for its policy.

Where the cedi parts company with Frankfurt

The comparison, however, only stretches so far. The reasons advanced economy central banks reported losses are not the reasons the Bank of Ghana reported them.

In Washington, Frankfurt, Berlin and London, losses were the legacy of quantitative easing. Long-dated bonds bought at negligible yields during the pandemic became expensive liabilities once policy rates were raised to fight inflation. The negative carry was foreseeable, in some sense priced in, and is shrinking as old bonds mature and are not replaced. They are, in essence, losses on past policy.

The Bank of Ghana’s losses are different. They are not the hangover from a QE programme, Accra never ran one, but the running cost of present-day policy. Three drivers dominate the 2025 result, and each tells its own story.The first, and largest, is sterilisation. To curb inflation, the Bank issues short-tenor bills that drain liquidity from the banking system, and pays interest on them. That cost almost doubled, from GH¢8.6 billion in 2024 to GH¢16.7 billion in 2025.

The second is the Domestic Gold Purchase Programme, which has expanded official gold reserves to roughly 111 tonnes from less than one tonne in 2021 but recorded an accounting cost of about GH¢9 billion last year, up from GH¢5.7 billion. The third is the foreign exchange revaluation effect: a stronger cedi compresses the local-currency value of foreign reserves, producing the GH¢19.32 billion OCI charge, a paper loss with no corresponding cash outflow.

Two of these three, sterilisation and gold accumulation, are direct, ongoing policy costs. They will recur for as long as the policy mix does. That is not the eurozone story.

A policy gamble or a political one?

It is here that the debate has turned political, and properly so. The Minority in Parliament, led by Member of Parliament for Ofoase-Ayirebi, Kojo Oppong Nkrumah, has insisted that the GH¢15.63 billion headline understates the real damage. Including the comprehensive income charge, and stripping out the GH¢9.57 billion gain from gold sales used to cushion the bottom line, the Minority puts the underlying loss closer to GH¢34.9 billion, and up to GH¢44 billion on the broadest reading. The Public Accounts Committee chair, Abena Osei-Asare, has gone further: gold accumulated in 2023 and 2024, she contends, was liquidated to mask losses, even as the same government has tabled a Ghana National Gold Purchase Programme proposing to buy 242.68 tonnes at an estimated cost of nearly a quarter of a trillion cedis. The sequencing, she argues, is a policy contradiction.

The Institute of Economic Research and Public Policy, in a pointed May 2026 paper, has gone furthest. It describes the Bank of Ghana as being in “structural financial distress,” flags departures from International Financial Reporting Standards in the treatment of gold, foreign exchange gains and foreign securities, and questions whether the going-concern assertion can be sustained without a legally enforceable recapitalisation pathway.

These are not idle complaints. The auditors, KPMG, themselves a fresh appointment for the 2025 accounts, issued an emphasis-of-matter paragraph on the IFRS departures, noting that statements prepared under the Bank of Ghana Act may not be suitable for purposes other than statutory reporting. Direct comparisons with peer central banks, on a like-for-like basis, are therefore harder than the Majority’s defence implies.

The harder question, however, is whether the same disinflation could have been bought for less. Member of Parliament Dr Gideon Boako, of the parliamentary Finance Committee, has called the result a new low, observing that 2025 was, by any reasonable measure, a non-crisis year. The 2024 loss had narrowed; comprehensive income had turned positive; the balance sheet was stabilising. The 2025 reversal, on his account, owes more to choices made under new central bank management than to economic conditions inherited.

This is the fault line. If the doubling of open market operation costs delivered an 18-percentage-point fall in inflation that would not otherwise have occurred, the books are honest, if expensive. If it merely accelerated a disinflation already in train, at a fiscal cost ultimately borne by the same Treasury that will recapitalise the Bank between 2026 and 2032, then the loss is, in a substantive sense, public expenditure conducted off-budget. Both readings are defensible on the available evidence. Neither is comfortable.

The recapitalisation arithmetic

The recovery plan is itself sobering. Under the Memorandum of Understanding signed between the Ministry of Finance and the Bank on 6 January 2025, and underwritten by the Bank of Ghana Act amendments raising minimum authorised capital from GH¢10 million to GH¢1 billion, the Bank is to receive phased capital injections through to 2032. Returning to positive equity, the IERPP estimates, would require the Bank to clear roughly GH¢29 billion a year, against a current loss trajectory of GH¢15.6 billion, for seven consecutive years. That is a heroic assumption in a country whose IMF-supported programme will dictate fiscal space for at least part of the runway.

It also raises a question the Bank cannot itself answer: where the Fund stands. Programme conditionality typically involves close monitoring of monetary policy. Either the Fund endorsed the cost trajectory of Ghana’s 2025 disinflation, or it raised concerns that have not been publicly disclosed. Either answer carries implications for transparency, and, by extension, for the Bank’s hard-won credibility.

The verdict, such as it is

Central bank losses, in themselves, are not a sign of failure. The Czech, Swiss and indeed eurozone experience has made that plain. A monetary authority that defends price stability cannot also be a profit centre, and pretending otherwise leads to bad policy. To that extent, the Majority’s defence rests on solid intellectual ground.

But Ghana is not the eurozone. The Bank of Ghana’s losses are not the cost of unwinding past mistakes; they are the running price of present choices, including a gold accumulation programme whose timing and scale are now being questioned by Parliament’s own oversight committees. Whether those choices represent the optimal trade-off, or merely the most politically saleable one, is a question the Bank’s audited statements cannot answer on their own.

What is clear is that “stability has a price” is no longer the end of the conversation. It is, increasingly, the beginning of one.

Daniel Kojo Hollie is a writer covering Ghanaian law, business, and economic policy. He contributes to the Business & Financial Times. The writer welcomes correspondence at [email protected]

Post Views: 39