The Bank of Ghana (BoG) has reported a further and pronounced weakening of its financial position for the 2025 fiscal year, with its balance sheet showing a negative equity position of GH¢35 billion.
This development has pushed the central bank’s cumulative deficit to GH¢96.3 billion, underscoring the scale of financial strain it faces even as it continues efforts to restore macroeconomic stability.
The figures, contained in the Bank’s latest audited financial statements, highlight the extent to which policy-driven interventions have weighed on its finances. While the headline numbers point to a deteriorating balance sheet, they also reflect the cost of deliberate and sustained measures to stabilise inflation, strengthen the currency, and rebuild external reserves in a challenging economic climate.
The evolution of the Bank’s equity position over the past three years has been particularly striking. In 2023, the institution recorded a modest positive equity of GH¢1.2 billion.
This position shifted sharply in 2024, falling into a deficit of GH¢61.3 billion, before worsening further to a negative GH¢35 billion in 2025. The cumulative effect has been a rapid erosion of the Bank’s capital base.
At the core of the 2025 outcome is a net loss of GH¢15.6 billion, a significant increase from the GH¢9.4 billion loss reported in 2024.
In addition, the Bank recorded a substantial charge of GH¢19.32 billion under other comprehensive income, largely driven by valuation effects linked to exchange rate movements—particularly the appreciation of the Ghanaian cedi against major international currencies.
As the cedi strengthened, the domestic currency value of the Bank’s foreign-denominated assets—including reserves held in foreign currencies and gold—declined when converted into cedi terms. Although this resulted in a sizeable accounting loss, it did not represent a reduction in the underlying assets. Rather, it reflects a valuation adjustment, the inverse of gains typically recorded during periods of currency depreciation.
Together, the net loss and the revaluation charge significantly eroded the Bank’s equity, deepening its negative position. Despite the severity of these figures, the central bank has emphasised that the deterioration is largely the result of deliberate policy choices rather than operational inefficiencies.
A key driver of the negative equity position is the cost of combating inflation. In 2025, the Bank of Ghana intensified its monetary tightening stance, relying heavily on liquidity sterilisation operations to absorb excess liquidity from the financial system.
This involved issuing short-term instruments and paying interest to investors—a process that carries substantial financial costs.
The cost of these sterilisation operations rose sharply during the year, increasing from GH¢8.6 billion in 2024 to GH¢16.7 billion in 2025. While this escalation placed considerable pressure on the Bank’s income statement, it contributed to a meaningful decline in inflation, which fell by 18 percentage points over the period. This outcome underscores both the effectiveness of the policy and the financial trade-offs involved.
Another significant contributor to the Bank’s financial position is the cost of building external reserves, particularly through its gold accumulation programme. The accounting cost associated with this initiative rose from GH¢5.7 billion in 2024 to GH¢9 billion in 2025. Despite the impact on reported earnings, the central bank has clarified that these are not realised losses.
The gold acquired under the programme remains a valuable asset on the Bank’s balance sheet, with holdings increasing dramatically to approximately 111 tonnes in 2025, up from less than one tonne in 2021.
This expansion strengthens the country’s external buffer, boosts confidence in the currency, and reduces reliance on external borrowing. In effect, the Bank is trading short-term financial strain for long-term economic resilience.
Exchange rate dynamics also played a central role in shaping the Bank’s financial outcome. The appreciation of the cedi during the year led to a decline in the cedi value of foreign reserves, contributing to the GH¢19.32 billion charge recorded in other comprehensive income. This occurred even as gross international reserves increased significantly, rising from US$9.1 billion to US$13.8 billion.
This apparent contradiction highlights the distinction between accounting outcomes and underlying economic realities. While valuation effects reduced the reported value of assets in cedi terms, the actual volume of reserves increased, strengthening Ghana’s external position. From a macroeconomic perspective, a stronger currency helps contain inflation and reduce the cost of imports—even if it results in accounting losses for the central bank.
The roots of the Bank’s negative equity position, however, predate the 2025 financial year. A significant portion of the deterioration can be traced to the Domestic Debt Exchange Programme implemented between 2022 and 2023. Designed to restore Ghana’s debt sustainability, the programme had far-reaching implications for the central bank’s balance sheet.
In 2022, the Bank reported a negative equity position of GH¢55.1 billion, a sharp reversal from the positive GH¢5.2 billion recorded in 2021. This shift was largely driven by the impairment of government securities held by the Bank following the restructuring of public debt. Both marketable and non-marketable instruments were affected, with some subjected to a 50 percent reduction in value.
The restructuring resulted in an impairment loss of approximately GH¢48.40 billion. Additionally, it significantly reduced the interest income earned by the Bank on government securities—by an estimated GH¢13 billion annually. This reduction is expected to persist until the restructured instruments mature, continuing to weigh on the Bank’s financial performance.
Through this process, the central bank effectively absorbed part of the country’s fiscal adjustment burden. Its negative equity position, therefore, reflects its role in supporting broader economic recovery efforts.
Recognising the implications of this situation, the Government of Ghana, in collaboration with the International Monetary Fund, entered into a Memorandum of Understanding with the Bank on January 6, 2025. This agreement outlines a framework for potential recapitalisation should it become necessary to restore the Bank’s capital base.
Despite concerns surrounding the negative equity position, the central bank has stressed that it does not impair its ability to perform its core functions.
The Bank continues to conduct monetary policy, manage foreign reserves, and regulate the financial system effectively. Its authority is derived from its legal mandate rather than its balance sheet strength.
Importantly, Ghana’s experience is not unique. Several central banks globally have reported similar financial outcomes in recent years as they tightened monetary policy to combat inflation. These cases demonstrate that negative equity does not necessarily undermine policy credibility or operational effectiveness.
In Ghana’s case, the Bank points to tangible macroeconomic improvements as evidence of the effectiveness of its policy stance. Its operational position strengthened significantly during the year, with policy-related income rising from approximately GH¢700 million to GH¢5.5 billion. This suggests that the Bank generated sufficient income to support its policy interventions, even in the face of overall losses.
Nevertheless, the persistence of negative equity raises important considerations for the future. It underscores the need for strong coordination between monetary and fiscal authorities to manage the long-term effects of debt restructuring and ensure the sustainability of public finances. It also brings into focus the potential need for recapitalisation, which could have fiscal implications.
For now, the central bank remains focused on maintaining macroeconomic stability. The 2025 financial results, though stark, reflect the cost of restoring stability in a difficult economic environment.
Encouragingly, these efforts are beginning to yield results, with lower inflation and a more stable currency supporting economic recovery.
As Ghana continues along this path, the Bank’s balance sheet may remain under pressure in the near term.
However, policymakers maintain that the trade-off is justified. The short-term financial losses being absorbed by the central bank are seen as a necessary price for achieving long-term economic stability and resilience—an outcome that ultimately benefits the broader economy.
