A macroeconomist has challenged the framing of the Bank of Ghana’s (BoG) 2025 financial losses as evidence of institutional failure, arguing that the central bank’s monetary policy credibility has strengthened over the past year even as its accounting position deteriorated sharply.
Writing in a detailed analysis, Dennis Nsafoah acknowledged that the BoG’s 2025 financial statements reflect undeniable and significant losses. The central bank recorded a net operating loss of GH¢15.63 billion, a comprehensive loss of approximately GH¢34.95 billion and a negative equity position of roughly GH¢96 billion. Nsafoah described these figures as real, consequential and not dismissible, warning that persistent accounting losses can weaken institutional credibility, increase fiscal dependence and complicate future recapitalization.
However, he argued that evaluating a central bank purely on accounting profitability misunderstands its core function. Unlike commercial institutions, central banks exist to maintain price stability, anchor inflation expectations and preserve macroeconomic balance rather than to generate profits. Nsafoah said the more important question is whether a central bank remains capable of implementing credible stabilization policy, a concept he described as policy solvency.
On that question, he raised direct concerns about the BoG’s own methodology. The central bank reported a positive policy solvency position of GH¢5.50 billion by comparing operating income of GH¢22.23 billion against Open Market Operations (OMO) costs of GH¢16.73 billion. Nsafoah identified a fundamental problem with this calculation: GH¢9.57 billion of the reported operating income came from one-time realized gains on gold sales rather than recurring operational revenue.
Stripping out those gold-sale proceeds reduces adjusted recurring income to GH¢12.66 billion, which falls short of the GH¢16.73 billion OMO cost by GH¢4.07 billion. Under the BoG’s own accounting framework, the institution would therefore remain policy insolvent on a recurring basis.
Yet Nsafoah argued that policy solvency itself should not be reduced to any single accounting calculation. He said the stronger test lies in macroeconomic outcomes, specifically whether inflation expectations are anchored, whether exchange-rate stability has been achieved, whether fiscal dominance has been reduced and whether reserve adequacy has improved. By those measures, he said the BoG performed well in 2025, demonstrating commitment to inflation reduction, aggressive liquidity sterilization and meaningful exchange-rate stabilization despite the financial cost.
“My answer is a strong and unequivocal no,” he wrote, when asked whether the BoG is less credible today than a year ago.
Nsafoah also raised questions about the central bank’s recently announced target of building foreign exchange reserves equivalent to 15 months of import cover. He cautioned that reserve accumulation is not costless, noting that the BoG’s rising sterilization expenses in 2025 were a direct consequence of reserve building. He said pursuing an overly ambitious reserve target could require continuous expansion of OMO operations, growing monetary liabilities and persistently high interest costs, potentially without proportionate macroeconomic benefit.
The analysis adds an independent expert dimension to a debate that has already drawn sharp political lines, with opposition figures and government officials clashing publicly over how to interpret the central bank’s financial condition.
