Bank of Ghana’s Losses and Public Gains: Understanding the accounting cost of Ghana’s monetary stabilisation and the benefit to citizens

The Bank of Ghana’s 2025 annual financial results, released on 1 May 2025, show a significant accounting loss, which stems from four specific monetary policy interventions aimed at stabilizing the economy. The loss does not indicate institutional failure but reflects the financial cost of policies that delivered the most substantial macroeconomic stabilization in recent history. The Bank remains policy solvent, meaning it can still fulfill its obligations despite the accounting shortfall. Before the interventions, Ghana faced severe economic challenges: headline inflation peaked at 54.1%, the cedi was depreciating rapidly, public debt was at 78.6% of GDP, and international reserves covered only 2.71 months of imports. By December 2025, inflation had fallen to 5.4%, the cedi appreciated by 40.7%, and gross international reserves reached a record $14.5 billion, equivalent to 5.85 months of import cover. GDP growth hit 6.02% overall and 7.57% non-oil, the strongest non-oil performance since 2019, alongside a primary fiscal surplus of 2.6% of GDP. The first driver of the loss was the domestic debt exchange program, part of an IMF-supported adjustment that reduced the Bank’s income-generating assets. The second was the cost of open market operations, where the Bank paid interest to absorb excess liquidity, spending GHC 16.7 billion to lower inflation from 54.1% to single digits. These costs reflect the deliberate price of disinflation, benefiting households and businesses through lower inflation. The third source is Ghana’s domestic gold program, where gold purchases are recorded at market rates but valued at a fixed official rate, creating an accounting discrepancy. The fourth is foreign exchange interventions, where the Bank sold dollars to stabilize the cedi, incurring losses due to exchange rate fluctuations. Despite the accounting loss, the Bank’s policies delivered measurable benefits: inflation at its lowest in 30 years, stronger currency, higher reserves, and robust GDP growth. The cost reflects the price of economic stability, ensuring long-term gains for citizens and businesses.