Kojo Oppong Nkrumah, the Ranking Member of Parliament’s Economy and Development Committee, called on the government on Wednesday, May 13, to cease fiscal and monetary policies that he claims are exacerbating financial difficulties at the Bank of Ghana (BoG). He emphasized a shift from merely identifying the central bank’s challenges to actively stopping policy actions that are worsening its financial standing.
Context of Central Bank Financial Health
The Bank of Ghana recently reported significant financial setbacks. Its audited financial statements revealed an operating loss of GH¢15.6 billion for 2025, a substantial increase from the GH¢9.4 billion loss recorded in 2024. This represents a GH¢6.2 billion jump in losses year-over-year.
Furthermore, the central bank’s negative equity position has worsened considerably. It grew from GH¢58.62 billion in 2024 to GH¢93.82 billion in 2025. This escalating negative equity indicates a deepening financial strain on the institution.
Specific Policy Criticisms
Mr. Oppong Nkrumah pinpointed the structure of the gold purchase program as a key contributor to these losses. He argued that while the program’s intent might be sound, its current design is inherently flawed and responsible for the financial impact. He also highlighted that accounting adjustments do not resolve the underlying financial problems.
Another area of concern is the scale of liquidity sterilization operations. These operations are employed by the central bank to control inflation by absorbing excess liquidity from the financial system. According to Mr. Oppong Nkrumah, these sterilization activities have reached alarming levels.
He reported that approximately US$19 billion has been recorded in sterilization activities this year alone. This figure contrasts sharply with the roughly US$93 billion recorded in the previous year, a trend he described as potentially unsustainable if left unaddressed.
Data and Expert Concerns
The reported figures from the Bank of Ghana’s financial statements underscore the severity of the situation. The doubling of operating losses and the significant increase in negative equity paint a concerning picture of the central bank’s financial health.
Mr. Oppong Nkrumah’s warning about unsustainable reliance on sterilization operations suggests that the current monetary policy tools may be straining the central bank’s balance sheet. Such a situation could potentially limit the BoG’s capacity to effectively manage monetary policy in the future.
Implications for the Economy
The mounting losses and negative equity at the Bank of Ghana could have far-reaching implications for the broader economy. A weakened central bank may face challenges in maintaining price stability and ensuring financial sector stability.
This situation also raises questions about fiscal discipline and the effectiveness of current economic management strategies. The opposition is urging the government to consider alternative policy proposals, suggesting that a collaborative approach might be necessary to navigate these financial pressures.
Looking Ahead
As the Ghanaian economy grapples with these financial challenges at its central bank, attention will be focused on the government’s response. Whether policymakers will heed the opposition’s call to re-evaluate and potentially halt certain fiscal and monetary interventions remains to be seen. The sustainability of current sterilization operations and the long-term impact on the Bank of Ghana’s financial health will be critical indicators to watch in the coming months.
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