By Nadia Ntiamoah
The Bank of Ghana has pushed back strongly against growing public and political criticism over its financial health, insisting that despite recording a GH¢15.6 billion operating loss and deepening negative equity in 2025, it remains fully capable of executing its core mandate of managing inflation, interest rates, and overall monetary stability.
In its latest financial disclosures, the Central Bank, led by Governor Johnson Asiama, maintained that its operational strength should not be judged solely by headline losses, but by what it describes as “policy solvency”—the ability to finance monetary policy actions internally without resorting to emergency government bailouts.
According to the Bank, its capacity to generate income—particularly through open market operations used to control liquidity and stabilise the economy—remains intact.
These operations, though costly, are central to maintaining macroeconomic stability in the face of inflationary pressures and exchange rate volatility.
The defence comes against the backdrop of intensifying scrutiny following the release of the Bank’s 2025 financial statement, which not only reported the GH¢15.6 billion operating loss but also revealed that its negative equity position had worsened significantly to about GH¢93 billion.
The Bank attributes this deterioration largely to the lingering effects of the Domestic Debt Exchange Programme and the cost of monetary interventions undertaken over the past two years.
Despite these figures, the Bank insists that its medium-term outlook remains positive. It projects that between 2026 and 2030, the economy will experience sustained GDP growth, continued disinflation, and a more stable external sector—conditions it believes will gradually restore its financial strength.
“These conditions are expected to progressively improve the Bank’s net interest income, reduce interest expenses, and restore profitability over time,” the statement indicated.
The Central Bank further emphasised that returns from its external reserves portfolio will continue to provide a reliable income stream, especially as global interest rates remain supportive.
It also pointed to expectations of a shift in monetary policy towards easing, which would reduce the cost pressures currently associated with aggressive liquidity management.
A key pillar of the Bank’s recovery strategy is a government-backed recapitalisation programme agreed with the Ministry of Finance.
Under this arrangement, the government is expected to inject financial support—either in cash or instruments—over a period spanning 2026 to 2032, to restore the Bank’s capital base to positive territory.
“The recapitalisation inflows are expected to result in positive net equity by 2032,” the Bank stated, adding that this would rebuild its reserves and strengthen its resilience against future financial shocks.
The Bank also argued that central banks globally can operate effectively even with negative equity, provided they retain credibility and the ability to conduct monetary policy.
In its view, the current situation does not impair its functional capacity, nor does it threaten macroeconomic stability.
However, the Bank’s assurances come at a time of sharp political debate, with opposition figures questioning both the scale of the losses and the methods used to achieve recent macroeconomic gains.
Critics have argued that the cost of stabilisation may be unsustainable if not matched by improvements in productivity and real economic activity.
Still, the Bank maintains that the benefits of its interventions—lower inflation, exchange rate stability, and improved investor confidence—justify the financial costs incurred.
