The Bank of Ghana (BoG) has posted cumulative losses of GH¢82.79 billion since the 2007 cedi redenomination, data from JoyNews Research reveals. This far outweighs its total profit of GH¢10.74 billion over the same period, highlighting a troubling trend of chronic financial underperformance.
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Although the BoG maintained relative stability in the early post-redenomination years, things began to unravel in 2017. That year, the central bank recorded a GH¢1.6 billion loss, its first during the review period.
In 2018, losses dropped to GH¢793 million. However, the trend reversed sharply in 2022 when the Bank reported a historic GH¢60.8 billion loss, largely due to the government’s Domestic Debt Exchange Programme (DDEP).
Losses continued in 2023 and 2024, with the Bank posting GH¢13.23 billion and GH¢9.49 billion, respectively. The DDEP had a significant impact. Under the IMF-supported recovery framework, the BoG’s government securities were restructured, leading to massive value write-downs and weakening its balance sheet.
But the DDEP isn’t the only cause. The BoG also suffers from persistent foreign exchange losses and the rising costs of Open Market Operations (OMO), used to control inflation and stabilize the money market. Sharp cedi depreciation, inflation, and global shocks have contributed to net losses on FX reserves, further compounding the central bank’s troubles.
Now, the BoG is in a state of negative equity, raising alarms about its long-term viability. To restore its capital base, four strategies are under consideration:
- Recapitalization through government budget allocations
- Transfer of state-owned assets to the Bank
- Suspension of profit transfers to the government
- Use of fiscal buffers from the IMF programme
Despite these options, Finance Minister Dr. Cassiel Ato Forson has indicated that limited fiscal space, due to rising debt servicing, a large wage bill, and mounting arrears, makes a full recapitalization via the national budget highly unlikely.
This presents a policy dilemma. A financially weak central bank could destabilize the economy, limit effective monetary policy, and shake investor confidence. Yet, Ghana’s tight budget leaves little room for quick fixes.
For now, the BoG continues to manage operations thanks to foreign exchange inflows from the GOLDBOD initiative and improved remittance systems. These measures offer some relief, but the underlying fiscal gap remains a major concern.
