There is an easy story to tell about a central bank: if it reports a loss, something must have gone wrong. It is neat, political, and completely misleading. Ghana’s recent experience tells a different story, one that is less comfortable but far more accurate.
The GH¢15.6 billion “loss” recorded in 2025 was not an economic failure. It was the financial cost of delivering one of the most decisive stabilisation turnarounds in the country’s recent history. To see that clearly, you have to start from where the system nearly broke.
By late 2022, Ghana’s macroeconomic framework had come under severe strain. Inflation surged to 54.1 percent, the cedi depreciated sharply, and confidence weakened across markets. Excess liquidity, built over time through monetary expansion and fiscal pressures was feeding directly into inflation and exchange rate instability.
The Domestic Debt Exchange Programme compounded the situation, imposing large impairments across the financial system. External buffers declined, and the economy entered a dangerous cycle: more liquidity, higher inflation, weaker currency, and rising uncertainty. That was the baseline.
2024: A Critical Turning Point
Even as stabilisation efforts began, risks remained. Ghana ended 2024 with a fiscal deviation of 3.1 percent of GDP, over GH¢36 billion in overspending, an amount roughly equivalent to the IMF programme envelope. That slippage posed a serious threat to the fragile recovery path. At that moment, the burden shifted squarely onto monetary policy. The Bank of Ghana had to act, not gradually, but decisively, to prevent a relapse into instability.
The core of that response was aggressive liquidity tightening. Open Market Operations (OMO), at a cost of GH¢16.7 billion, were deployed to pull excess money out of the system. This was not a technical adjustment; it was the turning point.
The impact is visible in the data. Reserve money growth collapsed from 104.5 percent to just 2.6 percent, while inflation fell sharply from 23.8 percent to 5.4 percent, and further to 3.2 percent by March 2026. That is not coincidence. That is policy transmission working exactly as intended. OMO was the instrument that broke inflation.
Understanding the “Loss”
Once you unpack the 2025 financials, the story becomes clearer. A significant portion of the reported loss comes from foreign exchange revaluation, about GH¢29.1 billion. But this was not a cash loss. It was a mechanical accounting effect of a stronger currency.
In simple terms, a $100 asset that was previously valued at around GH¢1,470 is now valued at about GH¢1,045 because the cedi appreciated by 40.7 percent. The dollar value did not change. Only the cedi equivalent did. The difference, about GH¢425, is recorded as a “loss,” even though no money left the system.
It is the accounting reflection of success. Then there is the GH¢9.1 billion cost associated with the Domestic Gold Purchase Programme (DGPP). Again, this is not consumption, it is investment. That programme helped lift Ghana’s reserves from $9.1 billion to $13.8 billion, the highest level in recent history, equivalent to about 5.7 months of import cover. What looks like a cost on paper is, in reality, the price of building external strength.
The most important mistake in the current debate is treating the financial loss in isolation, as if it exists without an outcome.
It does not. The stabilisation achieved through these interventions delivered measurable national gains: Inflation fell into single digits, restoring predictability to households and businesses. The strengthening of the cedi reduced the cost of imports, generating an estimated GH¢60 billion in savings for households and firms. Government finances also benefited, with over GH¢12 billion saved on foreign exchange-linked expenditures. Public debt dynamics improved significantly, declining from 61.8 percent to 45.3 percent of GDP. Lending rates began to ease. Market confidence returned.
These are not abstract gains. They are the difference between an economy under stress and one that is functioning again.
Central Banking Is Not About Profit
There is a reason the law is clear on this. Under Section 3 of the Bank of Ghana Act, 2002 (Act 612), the central bank’s primary mandate is not profitability. It is price stability and currency stability. That distinction matters. A central bank can report profits while inflation is rising and the currency is weakening. That would not be success. It would be failure in disguise. Conversely, it can report losses while inflation is falling and stability is restored. That is exactly what has happened. The 2025 outcome is best understood in those terms: It was not a loss in the economic sense. It was an investment in stability, and it worked.
Much of the criticism today rests on a superficial comparison: that the Bank is again paying interest through its operations, just as it did in the past. But the comparison ignores the direction of policy. Previously, excess liquidity was allowed to build up, feeding inflation and weakening the currency.
Today, liquidity is being deliberately withdrawn to restore stability. The instrument may look the same, but the purpose, and the outcome are entirely different. Before, liquidity was part of the problem. Now, liquidity management is the solution.
It is also important to recognise that monetary policy did not act alone. The success of the Bank of Ghana’s actions was reinforced by fiscal discipline from the Ministry of Finance. Without that coordination, the gains would not have held. A repeat of fiscal slippage would have quickly reversed the progress. Stability, in this sense, was not accidental. It was coordinated.
Moments like this do not respond to incrementalism. They require clarity, speed, and conviction. The turnaround reflects the policy direction under Governor Dr. Johnson Asiama, supported by Dr. Zakari Mumuni and Mrs. Matilda Asante-Asiedu. The willingness to absorb short-term financial costs in order to restore macroeconomic stability was not the easy choice, but it was the necessary one.
There is a final way to think about this. If the Bank had avoided these costs, by not tightening, not sterilising, and not supporting the currency the financial statements might have looked better in the short term. But the economy would have looked worse. Prices would be higher. The currency weaker. Confidence lower. Instead, the opposite has happened. The cedi strengthened. Inflation collapsed. Stability returned. The accounting outcome followed from that choice. And that is the point.
Stability came at a cos, but it was a cost worth paying.
thebftonline
