Accra, Ghana – A member of Parliament’s Finance Committee and MP for Sagnarigu, Attah Issah, asserted on Monday, May 4th, that the Bank of Ghana’s (BoG) current negative equity position does not signify policy insolvency, emphasizing the central bank’s continued ability to fulfill its core functions.
Understanding Central Bank Mandates
Speaking on Joy FM’s Newsnight, Mr. Issah clarified that the concept of “negative equity” in a central bank context differs significantly from that of a commercial enterprise. “If you say ‘negative equity’, it doesn’t mean the Bank is policy insolvent. The Bank is not in the business of making profit,” he stated.
He underscored that the BoG’s primary mandate, as outlined in Section 9 of its governing act, is to ensure price stability, manage foreign reserves, and maintain overall economic stability. “As in the mandate of the Bank of Ghana in section 9, the idea of the Bank of Ghana is to stabilise the price and then make sure that we manage our reserves and overall economic stability. That has been achieved based on the prevailing macroeconomic indicators,” Mr. Issah explained.
Deconstructing the Negative Equity Figure
Mr. Issah sought to demystify the reported GH¢96.3 billion negative equity figure, explaining it as a cumulative sum rather than a single year’s loss. “When they say the negative equity position of the Bank of Ghana, this 96.3 billion, it is not a one-off negative equity; it is a cumulative concept,” he elaborated.
He detailed the calculation: “At the end of 2024, the total negative equity of the Bank was 61.3 billion. This year, if you add the total loss plus the other comprehensive income, it gives you 35 billion. When you add it to the 61 billion, that gives you the 96.3 billion.” Thus, the current figure represents the accumulation of GH¢61.3 billion from 2024 and GH¢35 billion from the current year.
Policy Actions and Their Costs
The negative equity, Mr. Issah explained, is largely a consequence of deliberate policy decisions undertaken to stabilize the Ghanaian economy. “The OMO [Open Market Operations] cost was high because we wanted to tame inflation within the 8 to 10 per cent band, which we have achieved,” he noted.
Furthermore, efforts to bolster foreign reserves and stabilize the currency also contributed to these costs. “We also wanted to make sure we stabilise the currency… and build our reserve from 9.1 billion to 13.35 billion, which we have achieved,” he added.
Medium- to Long-Term Solutions
Looking ahead, Mr. Issah highlighted several measures designed to alleviate pressure on the Bank’s balance sheet. A significant development is the reserve accumulation program passed in February 2026, which alters the accounting treatment of gold-related transactions.
“The cost incurred in accessing the reserve position through the gold board will no longer sit on the books of the Bank of Ghana. It will now sit on the books of the off-takers, and the Bank of Ghana gets reserves out of that,” he explained. This reclassification is expected to improve the BoG’s balance sheet position.
Additionally, the costs associated with tight monetary policy are anticipated to decrease. “If you look at the 16.27 billion that was occasioned through the tight monetary policy… that will no longer feature because inflation has already come down below even the IMF projection and that of the Government of Ghana,” Mr. Issah stated.
The recent stability in the exchange rate is also expected to curb future losses. “Once we are now seeing some level of stability in the exchange rate, it means that there will not be so many exchange losses,” he added.
Global Context and Future Outlook
Mr. Issah drew parallels with international central banks, noting that negative equity is not an isolated phenomenon. “The European Bank and the Federal Reserve Bank in America all run negative equity, but they are still policy solvent,” he observed, reinforcing the argument that this situation does not equate to operational failure.
Confidence in the effectiveness of ongoing policy measures was expressed. “Moving forward, our expectation is that through the Ghana Revenue Acceleration and Accumulation Policy, we will no longer see these debts on the books of the Bank of Ghana,” Mr. Issah concluded, indicating a strategic approach to managing the central bank’s financial position.
The focus now shifts to the implementation and impact of these medium- to long-term strategies. Investors, economists, and the general public will be closely monitoring the Bank of Ghana’s balance sheet developments and the sustained achievement of its core economic stability mandates in the coming months and years.
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