Accra, Ghana – May 4, 2026
The Bank of Ghana’s aggressive fight against soaring inflation since 2022, which saw prices peak at 54 percent, has incurred significant economic costs, according to Professor Ebo Turkson, an External Member of the Monetary Policy Committee. Speaking on JoyNews’ Newsfile program on Saturday, May 2, 2026, Professor Turkson explained that while achieving price stability is a crucial public good, the necessary monetary policy interventions inevitably involve trade-offs.
The Price of Stability
Professor Turkson emphasized that the success of any monetary policy should primarily be measured by its ability to meet its mandate, particularly controlling inflation, rather than by the absence of economic costs. He highlighted that Ghana’s inflation crisis reached its zenith in December 2022, necessitating decisive action from policymakers.
“At the height of the crisis in 2022, inflation hit 54 per cent. There was a need to use all the tools available to bring it down,” Professor Turkson stated.
To combat this demand-driven inflation, compounded by supply-side pressures, the Monetary Policy Committee implemented stringent measures. These included raising the policy rate and conducting liquidity mop-up operations through the banking system to withdraw excess money from circulation.
“When bonds are sold to take out liquidity, the interest rate is closely linked to the policy rate. As we fought inflation at 54 per cent, the policy rate went up, and interest costs also rose,” he explained. These ongoing liquidity management operations have been integral to the Bank of Ghana’s efforts to restore macroeconomic stability over the past few years.
Financial Fallout
These interventions have come under renewed public scrutiny following the Bank of Ghana’s recent report of a GH¢15.6 billion loss. This substantial financial figure has reignited debate about the economic burden of the central bank’s actions during the period of high inflation.
Professor Turkson, however, defended the measures, asserting that despite their considerable cost, they were essential to avert a more severe economic downturn and re-establish price stability for the nation.
Monetary Policy as a Public Good
The concept of monetary policy as a public good, akin to the construction of public infrastructure like roads, was central to Professor Turkson’s argument. He posited that, like any major public undertaking, achieving monetary policy objectives requires substantial investment and incurs costs.
“The central bank and its monetary policy mandate are a public good. Like building roads, we incur a huge cost. Any monetary policy that the central bank does, the objective analysis of that policy is whether it met its mandate or not,” he articulated.
He further elaborated that expecting the central bank to navigate a severe crisis, such as the one beginning in 2022, without incurring any economic cost would be unrealistic. The aggressive stance taken was a direct response to the prevailing economic conditions, aimed at anchoring inflation expectations and restoring confidence in the Ghanaian economy.
Looking Ahead
The substantial financial loss reported by the Bank of Ghana raises critical questions about the long-term sustainability of such aggressive monetary interventions. As the economy continues to stabilize, stakeholders will be closely watching the central bank’s strategy for managing its balance sheet and its approach to future monetary policy decisions.
The trade-off between immediate economic costs and long-term price stability remains a key challenge. Future policy actions will likely be scrutinized not only for their effectiveness in controlling inflation but also for their fiscal implications and impact on overall economic growth. The central bank’s ability to balance these competing priorities will be crucial in navigating Ghana’s economic landscape in the coming years.
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