A deepening controversy has emerged over the financial health of the Bank of Ghana, with the Minority in Parliament attributing the institution’s worsening losses not to unavoidable economic stabilisation measures, but to what it describes as politicisation and a series of costly policy reversals introduced in 2025.
At a press conference led by Kojo Oppong Nkrumah, the Minority Caucus argued that the central bank’s financial deterioration is largely self-inflicted, pointing to specific decisions that significantly increased the cost of monetary policy operations.
Their position follows the release of the Bank’s 2025 audited financial statements, which revealed rising operating costs and a sharp deterioration in its balance sheet.
The Minority’s critique begins with what it calls the politicisation of the central bank.
According to them, the sequence leading to the publication of the Bank’s accounts was breached when members of the ruling party addressed a press conference on the figures before they were formally presented to Parliament, contrary to provisions in the Bank of Ghana Act.
They warned that such actions risk undermining the independence and credibility of the central bank, insisting that financial reporting should not be reduced to partisan messaging.
However, beyond the procedural concerns, the Minority placed greater emphasis on what it described as “self-inflicted costs” arising from policy reversals at the central bank.
They argue that these decisions, rather than external economic pressures, explain the ballooning cost of liquidity management particularly the GH¢16.7 billion spent on open market operations in 2025.
One of the key reversals highlighted is the abandonment of the dynamic cash reserve ratio framework. Under the previous policy, banks that extended more credit to the private sector were allowed to hold lower reserves, while those that preferred risk-free investments were required to hold higher, non-interest-bearing reserves.
This approach, the Minority noted, helped absorb excess liquidity at minimal cost to the central bank while encouraging lending to businesses.
The decision to scrap this system in 2025, they argue, forced the Bank to rely on more expensive tools, including issuing high-interest bills to mop up liquidity. The impact, they said, is evident in the data: sterilisation bills reportedly tripled within a year, while interest payments surged from about GH¢6.2 billion to over GH¢14.6 billion.
A second major policy shift cited is the reversal of the cedi-equivalent reserve requirement on foreign currency deposits. Previously, banks were required to hold reserves in cedis even for foreign currency deposits, a measure that helped contain excess liquidity. The new policy allowed banks to hold reserves in the same currency, effectively releasing additional liquidity into the system.
According to the Minority, this liquidity quickly returned to the central bank in the form of high-interest instruments, further increasing the cost burden.
“They flooded the system with liquidity and then paid heavily to mop it up,” the Caucus argued, describing the move as both predictable and avoidable.
The third policy concern raised relates to changes in the structure of the gold purchase programme. The Minority contends that the earlier framework allowed for gold accumulation without generating losses, but recent adjustments.particularly the expanded role of the Ghana Gold Board have shifted costs onto the central bank.
They explained that this has resulted in significant losses recorded on the Bank’s books, even as other institutions within the same framework report profits.
Beyond these reversals, the Minority highlighted what it sees as a troubling consequence of current policy choices: a large-scale transfer of public funds to commercial banks.
They pointed out that in 2025 alone, the Bank of Ghana paid over GH¢14 billion in interest to banks holding its bills, contributing to record profits in the banking sector.
“This is not monetary policy; it is a transfer of public resources to private balance sheets,” they argued, noting that while banks earned risk-free returns, credit to the private sector declined sharply. Data cited by the Minority indicates that private sector credit growth dropped significantly in 2025, making it harder for businesses, entrepreneurs, and young people to access financing.
The broader economic impact, they said, is being felt across sectors. Manufacturers are reportedly facing weak demand, farmers are struggling with market access, and households continue to grapple with high living costs despite improvements in headline macroeconomic indicators such as inflation and exchange rate stability.
While the Majority has defended the Bank’s expenditures as necessary to stabilise the economy, the Minority insists that the real issue lies in the methods used to achieve those outcomes.
They argue that stability achieved through costly and unsustainable interventions cannot be maintained, warning that continued reliance on such approaches could further weaken the central bank’s financial position.
In their view, the deterioration seen in 2025 marks a reversal of the recovery path the Bank had begun in 2024, when losses were narrowing and balance sheet indicators were improving. The shift, they maintain, coincides directly with changes in policy direction under the current administration.
