Accra, Ghana – The Bank of Ghana (BoG) recently reported a GH¢15.6 billion financial loss for 2025, a figure that has dominated public discourse. However, this headline figure represents not an economic failure, but the significant financial cost incurred to engineer a rapid economic stabilisation and achieve one of the most dramatic turnarounds in Ghana’s recent history. The actions taken by the central bank were crucial in curbing rampant inflation and restoring fiscal discipline.
Context: A Nation on the Brink
Ghana entered 2025 facing considerable economic challenges. Fiscal deviation stood at 3.1% of GDP, amounting to over GHS36 billion in overspending – a deficit comparable to the entire value of an IMF programme loan. This fiscal indiscipline had flooded the banking system with excess liquidity, entrenching inflationary pressures and devaluing the national currency.
The Policy Costs of Economic Rescue
The reported loss is primarily attributed to three key policy interventions undertaken by the Bank of Ghana. These were not indicative of mismanagement but were necessary costs to correct the economic imbalances.
Open Market Operations (OMO) to Absorb Liquidity
The BoG incurred GH¢16.7 billion in interest costs through Open Market Operations (OMO). This policy involved issuing instruments to withdraw excess money from the financial system. This aggressive absorption of liquidity was instrumental in engineering a sharp decline in reserve money growth.
Data from the Bank of Ghana illustrates a direct correlation: reserve money growth plummeted from 104.5% in late 2024 to just 2.6% by December 2025. This decisive action was the primary driver behind the subsequent fall in inflation.
Domestic Gold Purchase Programme (DGPP) for Reserves
To bolster national reserves and enhance economic resilience, the BoG implemented a Domestic Gold Purchase Programme (DGPP). This initiative incurred costs of GH¢9.1 billion but resulted in a significant increase in foreign reserves.
Ghana’s reserves grew from $9.1 billion to $13.8 billion by the end of 2025. The import cover rose to 5.7 months, and the programme expanded to procure 111 metric tonnes of gold. This strategic accumulation of reserves contributed to the strengthening of the Ghana cedi.
FX Revaluation Charges from a Stronger Cedi
A substantial GH¢29.1 billion of the reported loss stems from FX revaluation charges. This accounting entry arose due to the significant appreciation of the Ghana cedi against major foreign currencies in 2025.
The cedi strengthened by 40.7% during the year. This appreciation reduced the cedi-denominated value of the Bank’s foreign assets on its balance sheet. It is crucial to note that this was an accounting adjustment, not a loss of actual reserves or cash. The same accounting principle had previously resulted in a GH¢12.7 billion gain in 2024 when the cedi weakened.
Demonstrable Economic Gains
The aggressive monetary policy actions, despite their accounting costs, yielded substantial economic benefits. Inflation fell for 13 consecutive months, dropping from 23.8% to 5.4%, and further to 3.2% by March 2026. This brought inflation back into single digits, a key indicator of economic stability.
The Ghana cedi’s 40% appreciation led to an estimated GHS60 billion in import-cost savings for Ghanaian households and businesses. Government expenses linked to foreign currency also decreased by over GHS12 billion. Furthermore, public debt as a percentage of GDP fell from 61.8% to 45.3%.
A Central Bank’s Mandate
Central banks are not commercial entities focused on profit maximization. Their primary mandate is to ensure price stability, protect the national currency’s value, and maintain confidence in the financial system. The Bank of Ghana’s 2025 financial results reflect the costs associated with fulfilling this critical mandate during a period of economic distress.
The actions of Governor Asiamah and his deputies, Dr. Zakaria and Mrs. Asante, demonstrate a commitment to economic stabilization. The bold and disciplined approach taken has successfully reversed years of fiscal slippages and monetary expansion, laying the groundwork for sustained economic recovery.
Looking Ahead
The Bank of Ghana’s experience highlights the complex interplay between monetary policy actions and financial reporting. As the nation moves forward, continued fiscal discipline from the Ministry of Finance will be crucial to sustain the gains made. Observers will be watching to see if the central bank can maintain inflation at its current low levels and if the strengthened reserves and cedi can foster continued economic growth and attract further investment. The effectiveness of these policies in the long term will be a key indicator of Ghana’s economic trajectory.
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