The Bank of Ghana has reported a further and significant deterioration in its balance sheet for the 2025 financial year, posting a negative equity position of GH¢35 billion and pushing its cumulative deficit to GH¢96.3 billion.
The latest figures, contained in the central bank’s audited financial statements, underscore the scale of financial pressures confronting the institution, even as it intensifies efforts to stabilise the macroeconomic environment.
The negative equity position represents a sharp progression from a positive GH¢1.2 billion recorded in 2023 to a deficit of GH¢61.3 billion in 2024, before deepening further in 2025.
At the core of the 2025 outturn is a net loss of GH¢15.6 billion, up from GH¢9.4 billion in the previous year.
In addition, the Bank recorded a substantial other comprehensive income charge of GH¢19.32 billion, largely driven by valuation effects linked to exchange rate movements, particularly the strengthening of the cedi against major international currencies. Together, these elements significantly eroded the Bank’s capital base, widening the negative equity position.
Despite the alarming headline figures, the central bank maintains that the deterioration reflects deliberate policy choices rather than operational inefficiencies.
According to the Bank, the losses are largely the financial cost of aggressive monetary tightening measures, reserve accumulation strategies, and accounting adjustments arising from exchange rate movements.
A major driver of the negative equity position is the cost incurred in fighting inflation.
In 2025, the Bank intensified its liquidity sterilisation operations by issuing short-term instruments to absorb excess money from the financial system, paying interest on these instruments in the process.
The cost of this intervention rose sharply from GH¢8.6 billion in 2024 to GH¢16.7 billion in 2025.
While expensive, the policy delivered measurable results, with inflation falling by 18 percentage points during the period.
The central bank also incurred significant costs in building up its foreign reserves, particularly through its gold accumulation programme.
The accounting cost of the programme rose from GH¢5.7 billion in 2024 to GH¢9 billion in 2025.
However, the Bank emphasised that these are not realised losses, as the accumulated gold—estimated at approximately 111 tonnes in 2025, up from less than a tonne in 2021—remains a valuable reserve asset on its balance sheet.
Another key factor behind the worsening equity position is the accounting effect of a stronger cedi.
As the domestic currency appreciated, the cedi value of the Bank’s foreign-denominated assets declined.
Although the Bank’s gross international reserves actually increased from US$9.1 billion to US$13.8 billion, the revaluation effect resulted in a charge of GH¢19.32 billion in the accounts. This reflects an accounting loss rather than an actual outflow of resources, and is the inverse of gains recorded in periods of currency depreciation.
However, the roots of the Bank’s negative equity position predate 2025 and can be traced back to the Domestic Debt Exchange Programme implemented between 2022 and 2023.
That programme, designed to restore Ghana’s debt sustainability, had a profound impact on the central bank’s balance sheet.
In 2022, the Bank reported a negative equity position of GH¢55.1 billion, reversing a positive position of GH¢5.2 billion in 2021. This was largely due to the impairment of government securities held by the Bank following the restructuring exercise.
Non-marketable instruments, including long-term government stocks, a COVID-19 bond, and overdraft facilities, were subjected to a 50 per cent haircut. Marketable securities were also exchanged under similar terms as those applied to other financial institutions.
The result was an impairment loss of approximately GH¢48.40 billion in 2022.
In addition, the restructuring reduced the interest income earned by the Bank on government securities by about GH¢13 billion annually, an impact that will persist until the affected instruments mature.
The central bank effectively absorbed part of the country’s fiscal adjustment burden, with the negative equity position serving as a balance sheet reflection of that contribution.
Recognising this, the Government of Ghana, in collaboration with the International Monetary Fund, signed a Memorandum of Understanding with the Bank on January 6, 2025, outlining a framework for potential recapitalisation should it become necessary.
While the negative equity position raises concerns about the Bank’s financial strength, authorities insist that it does not impair its operational capacity.
The Bank retains full authority to conduct monetary policy, manage foreign reserves, and supervise the financial system, as its mandate is derived from statute rather than its balance sheet position.
This situation is not unique to Ghana. Several major central banks have reported similar financial outcomes in recent years as they tightened monetary policy to combat inflation.
The European Central Bank recorded losses in 2023 and 2024, while the Federal Reserve has experienced sustained income shortfalls since September 2022.
Similarly, the Czech National Bank operated with negative equity for 17 consecutive years while maintaining strong policy credibility.
In the case of Ghana, the Bank argues that the financial costs incurred have yielded tangible macroeconomic benefits. Notably, its policy position improved significantly, rising from approximately GH¢700 million to GH¢5.5 billion.
This indicates that the Bank generated sufficient operational income to support its policy interventions, including efforts to stabilise inflation and the exchange rate.
Nonetheless, the persistence of negative equity carries broader implications.
It underscores the need for close coordination between monetary and fiscal authorities, particularly in managing the long-term impact of debt restructuring and ensuring the sustainability of public finances.
It also raises questions about the timing and scale of any future recapitalisation effort, which could have fiscal implications for the government.
For now, however, the central bank maintains that its priority remains macroeconomic stability.
The 2025 financial results, though stark, reflect the cost of restoring stability in a challenging economic environment—an effort that has already begun to yield results in the form of lower inflation and a more stable currency.
As Ghana continues its economic recovery, the Bank’s balance sheet may remain under pressure in the near term. But policymakers argue that the trade-off—short-term financial losses in exchange for long-term stability—is both necessary and justified.
