The Bank of Ghana has reported a $1.25 billion loss for 2025, sparking political debate and raising concerns about the sustainability of its policies. The losses stem largely from its gold-for-reserves strategy, where the central bank creates cedis to buy gold, sells it for dollars to boost reserves, and then borrows back the excess cash at high interest rates to control inflation. While this approach helped double reserves to $13.8 billion and stabilise the currency, it came at a steep financial cost.
Additional accounting losses pushed total comprehensive losses to $2.8 billion, with negative equity widening to about $9 billion—one of the largest among central banks globally. Despite this, the bank maintained price stability and lower inflation, which had been a major policy achievement following Ghana’s economic crisis. However, analysts warn that rising debt, high interest costs, and reliance on one-off gains could strain future operations. The government now faces a tough task of recapitalising the bank without worsening public finances.
From a fiscal perspective, central bank losses are not inherently problematic if they support broader economic stability. Many central banks operated with negative equity during the global financial crisis and still fulfilled their mandates. However, Ghana’s situation is complicated by its high public debt and ongoing IMF programme. The government may need to issue bonds to recapitalise the Bank of Ghana, adding to the debt stock, or allow it to operate with negative equity, which could undermine market confidence.
The gold-for-reserves strategy was innovative, using Ghana’s domestic gold production to build foreign buffers without depleting export earnings. But the high interest costs of mopping up the excess cedi liquidity created by gold purchases have proven expensive. A more balanced approach might involve tighter coordination between fiscal and monetary authorities, or greater use of non-interest-bearing instruments. For now, the Bank of Ghana’s losses have become a political flashpoint, with opposition figures questioning the central bank’s independence and competence.
