Bank of Ghana’s 2025 Losses: The Price of Economic Stabilization

The Bank of Ghana’s reported GH¢15.6 billion loss for 2025 has ignited a fierce debate, with critics labeling it as a sign of policy failure. However, a closer examination of the Bank’s financial statements and Ghana’s macroeconomic performance reveals a more complex picture: the losses appear to be a direct consequence of deliberate stabilization policies implemented to restore economic confidence following a period of significant turbulence.

Central banks worldwide prioritize macroeconomic stability—preserving currency value, controlling inflation, safeguarding reserves, and maintaining financial system confidence—over profit maximization. These crucial objectives often incur substantial operational costs, a phenomenon that the Bank of Ghana’s 2025 performance seems to exemplify.

Context: Ghana’s Economic Landscape

Ghana faced severe economic challenges in the years preceding 2025, marked by high inflation, currency depreciation, and a general loss of investor confidence. The government and the central bank embarked on a series of monetary and fiscal policies aimed at stabilizing the economy and restoring macroeconomic credibility.

The Macroeconomic Turnaround of 2025

Despite the reported financial losses, 2025 witnessed a dramatic improvement in Ghana’s key economic indicators. Inflation experienced a sharp decline, falling from 23.8% in 2024 to 5.4% by the end of 2025.

The Ghanaian cedi demonstrated significant appreciation against the US dollar. Gross international reserves saw a healthy increase, rising from US$9.1 billion to US$13.8 billion, thereby improving the import cover to approximately 5.7 months. Concurrently, the public debt-to-GDP ratio fell substantially, and both the policy rate and commercial lending rates decreased, easing financial conditions for businesses and households.

The Cost of Combating Inflation: Open Market Operations

The primary driver of the Bank of Ghana’s 2025 losses was the cost associated with Open Market Operations (OMO). The Bank’s financial statements indicate that OMO costs escalated from approximately GH¢8.6 billion in 2024 to GH¢16.7 billion in 2025.

These operations are a deliberate tool used by central banks to manage liquidity and curb inflation. By issuing instruments to absorb excess money from circulation, the central bank incurs interest expenses as it compensates commercial banks for holding these sterilisation instruments. This represents a direct financial outlay to reduce inflationary pressures.

This situation is not unique to Ghana. Many central banks globally have reported significant losses following aggressive monetary tightening aimed at combating post-pandemic inflation. For instance, the European Central Bank, the Bank of England, and the Federal Reserve System have all incurred substantial costs or deferred asset losses due to increased interest expenses and quantitative tightening operations.

Without these interventions, Ghana might have faced prolonged inflationary pressures, further weakening the cedi and perpetuating macroeconomic instability. The 2025 losses, therefore, can be seen as the fiscal cost of achieving price stability.

Exchange Rate Dynamics and Revaluation Losses

Another contributing factor to the Bank’s losses was revaluation and exchange-rate differences. Ironically, the cedi’s appreciation in 2025 led to accounting losses on the Bank’s foreign-currency holdings.

When a domestic currency strengthens significantly, the local currency value of foreign assets decreases. Although Ghana’s reserves grew in dollar terms, the conversion to cedis resulted in accounting revaluation losses. These fluctuations are common for central banks managing large foreign reserve portfolios.

It is important to distinguish between realised and unrealised losses. The controversy surrounding claims of a larger loss figure often stems from the inclusion of unrealised valuation adjustments on foreign securities, SDRs, and gold holdings. These are typically treated separately from operational losses under international accounting standards and the Bank of Ghana Act, as they do not arise from core policy operations but rather from market price movements.

Gold Reserves: A Strategic Diversification

The Bank’s gold operations also contributed to the losses. Ghana’s Gold-for-Reserves programme, which involved increasing gold holdings as part of reserve diversification, reflected a global trend among emerging-market central banks seeking to reduce reliance on traditional reserve currencies amid concerns about dollar volatility and geopolitical risks.

Central banks in Nigeria, South Africa, and Tanzania, as well as institutions like the People’s Bank of China and the Reserve Bank of India, have also expanded their gold reserves. For Ghana, a leading gold producer, this strategy held both symbolic and strategic importance.

However, accumulating gold reserves entails market risk. The Bank’s statements indicate that losses arose partly from weakened gold prices during certain trading periods between acquisition and disposal, alongside increased operational costs. In volatile commodity markets, timing mismatches can lead to temporary accounting losses, even if the long-term reserve strategy remains sound.

Reserve diversification strategies are typically evaluated over multi-year horizons, focusing on reserve adequacy and resilience against external shocks, rather than single-year profit-and-loss outcomes.

Financial Trajectory: 2022-2025

The Bank of Ghana’s financial performance in 2025 occurred against a backdrop of economic recovery, contrasting sharply with the severe crisis of 2022-2023. During that period, the Bank’s balance sheet absorbed significant shocks from the Domestic Debt Exchange Programme, exchange-rate pressures, and emergency measures.

While losses moderated in 2024 compared to the crisis years, the Bank still recorded negative equity. The 2025 losses, therefore, represent the costs of stabilization during a period of improving economic indicators, not a sign of collapse.

Furthermore, the Bank’s operational revenues reportedly grew significantly in 2025, with major income lines showing substantial improvement. The decline in net income was primarily due to the extraordinary costs of policy interventions and valuation adjustments, rather than weakened revenue generation.