Economist and Member of Parliament for Tano North, Dr Gideon Boako, has mounted a detailed and forceful critique of the Bank of Ghana’s (BoG) 2025 financial performance, arguing that the central bank’s reported losses significantly understate the true extent of its financial deterioration due to changes in accounting methodology.
According to him, when properly assessed, the Bank’s losses could be more than double the headline figure, exposing what he describes as deep-rooted policy failures and avoidable decisions that have weakened the central bank’s balance sheet.
Accounting method masks true losses
At the centre of Dr Boako’s argument is the distinction between reported losses and the broader financial impact captured under different accounting treatments.
The Bank of Ghana’s 2025 financial statement, published on May 1, 2026, reported an operational loss of GH¢15.6 billion—the second highest since the redenomination of the cedi in 2008.
However, Dr Boako insists this figure does not reflect the full picture.
“The Bank’s own document shows a staggering operating loss of GH¢15.63 billion and a deterioration in negative equity from GH¢58.62 billion to GH¢93.82 billion.
“But when you include GH¢19.32 billion losses recorded under in Other Comprehensive Income (OCI), the true loss rises to about GH¢34.92 billion,” he explained.
BoG’s financial reporting framework follows International Financial Reporting Standards (IFRS), but does not fully apply them in certain key areas due to specific legal provisions in the Bank of Ghana Act.
In summary, the main departures from IFRS relate to how the Bank treats gold, Special Drawing Rights (SDRs), and foreign securities, particularly in terms of valuation and recognition of gains and losses.
First, under IFRS—specifically IAS 21 (The Effects of Changes in Foreign Exchange Rates)—exchange rate gains and losses on foreign assets are normally recorded in the profit and loss account.
However, the Bank of Ghana Act overrides this requirement. Instead of passing these gains and losses through profit or loss, the Bank transfers both realised and unrealised foreign exchange movements on gold, SDRs, and foreign securities into a Revaluation Account (a special reserve).
This means that fluctuations in exchange rates do not directly affect the Bank’s reported annual profit or loss, as they ordinarily would under IFRS.
Second, regarding gold valuation, the Bank measures gold at fair value, which is broadly consistent with IFRS.
However, changes in the value of gold are recorded in other comprehensive income (OCI) rather than profit or loss, in line with the amended BoG Act.
This approach is designed to align gold valuation with the treatment of foreign currency movements.
Overall, while IFRS serves as a guiding framework for presentation and disclosure, the BoG Act takes precedence in these specific areas.
As a result, the Bank’s financial statements deviate from full IFRS application, particularly in the recognition and measurement of exchange rate and valuation changes related to gold and foreign reserve assets.
In view of this, separating some losses into “other comprehensive income” (OCI), has effectively reduced the visibility of the full financial burden.
Under previous IMF-based reporting standards, all such losses would have been captured within the main profit and loss account, making the scale of the deficit more apparent.
Gold sales propped up balance sheet
Dr Boako further revealed that the central bank’s financial position was significantly supported by gains from gold transactions, without which the losses would have been far worse.
In 2025, the Bank sold approximately 869,915 ounces of gold—equivalent to about 27.6 tonnes—leaving just 111,736 ounces, or 3.4 tonnes of the holdings it inherited.
The gold, much of which had been acquired at around $2,624.50 per ounce as at the end of 2024, was sold at a significantly higher price of about $4,323.87 per ounce in November and December 2025, generating proceeds of roughly $3.6 billion, equivalent to about GH¢40 billion.
This resulted in a realised gain of approximately GH¢9.57 billion, which became the single largest source of income for the Bank during the year.
In addition, unrealised gains accumulated over the previous two years contributed a further GH¢7.99 billion, bringing total gains from gold transactions to about GH¢17.56 billion.
“Strip that out, and the 2025 loss would have ballooned to about GH¢33.19 billion,” Dr Boako stated.
He pointed out that when GH¢9.57 billion income from gold sales is excluded; the total loss would have been GH¢44 billion.
He argued that this reliance on gold sales to offset operational losses raises serious concerns about sustainability.
“Gold reserves are meant to be a buffer for crises, not a tool to support routine operations,” he cautioned.
Policy failures at the core
Dr Boako attributed the Bank’s losses primarily to a series of policy decisions that, in his view, significantly increased the cost of managing liquidity in the economy.
A key factor, he said, was the abolition of the dynamic cash reserve ratio (CRR), which had previously enabled the central bank to absorb excess liquidity at minimal cost.
Under the earlier system, banks with lower lending activity were required to hold higher reserves at the central bank without earning interest, effectively reducing excess liquidity without imposing financial costs on the Bank.
Shift to flat CRR drove up costs
The introduction of a uniform 10% CRR across all banks, however, fundamentally changed this dynamic.
With only 10% of deposits held without interest, banks were left with significant excess liquidity, much of which was subsequently placed with the central bank in interest-bearing instruments.
“This meant the Bank of Ghana now had to pay to absorb liquidity it previously managed for free,” Dr Boako explained.
The impact was immediate and significant.
The cost of open market operations (OMO)—the primary tool used to mop up excess liquidity—rose sharply from GH¢8.2 billion in 2024 to GH¢16.73 billion in 2025.
Foreign exchange policy compounded problem
Dr Boako also pointed to changes in foreign exchange reserve rules as another costly policy reversal.
Previously, banks could convert foreign currency deposits into cedis for reserve requirement calculations, enabling the central bank to absorb more liquidity without paying interest.
The new policy, which requires reserves to be held in the same currency as deposits, effectively released dollar liquidity from the central bank’s control while increasing cedi liquidity in the system.
This excess cedi liquidity was then mopped up through expensive OMO operations, further driving up costs.
“What we have done is release liquidity and then buy it back at high interest. That is inefficient and costly,” he argued.
High-cost stabilisation strategy questioned
Dr Boako criticised the central bank’s broader approach to stabilisation, particularly its reliance on high-cost sterilisation measures even as inflation was already declining.
He argued that the Bank shifted back to its most expensive liquidity management tools unnecessarily, contributing to the sharp rise in losses.
“This is not simply the cost of stability; it is the result of policy choices that could have been avoided,” he emphasised.
Central bank absorbs losses, banks gain
Another key concern raised by Dr Boako is the apparent imbalance between the central bank and commercial banks.
He noted that while the Bank of Ghana is recording significant losses, commercial banks are benefiting from high interest payments on liquidity instruments.
“What we are seeing is that the central bank is booking losses, while commercial banks are recording profits,” he said.
This, he argued, effectively transfers financial resources from the central bank to the banking sector.
Solvency concerns emerge
Using the Bank’s own policy solvency framework, Dr Boako highlighted deeper concerns about financial sustainability.
In 2025, the Bank reported operating income of about GH¢22.2 billion, but nearly GH¢9.5 billion of this came from gold sales.
At the same time, the cost of open market operations alone stood at GH¢16.7 billion.
“If you remove the gold sales component, the Bank’s core income is significantly reduced, raising serious questions about its ability to sustain operations,” he noted.
Reversal of improving trend
Dr Boako recalled that after the 2022 economic crisis, the Bank’s financial performance had been improving.
Losses declined from about GH¢60 billion in 2022 to GH¢13.23 billion in 2023, and further to GH¢9.4 billion in 2024, with overall gains recorded when valuation effects were included.
Macroeconomic indicators also improved, with inflation falling and exchange rate pressures easing.
“Given this trend, one would have expected further improvement—not a reversal,” he said.
The return to higher losses in 2025, he argued, underscores the impact of the policy changes introduced during the year.
Avoidable cost of stability
While acknowledging that central banks globally have incurred losses in the fight against inflation, Dr Boako insisted that the scale of Ghana’s losses is neither inevitable nor justified.
“Stability does not have to come at this cost,” he stated.
He pointed out that in earlier periods of economic stability, including 2017 to 2019, Ghana achieved strong growth and low inflation without imposing such heavy financial burdens on the central bank.
Call for policy rethink
In conclusion, Dr Boako argued that the Bank of Ghana’s losses are not merely the unavoidable cost of stabilisation but reflect a series of avoidable policy decisions.
“The evidence is clear: the losses are the result of policy failure, not inevitability,” he said.
He warned that continued reliance on high-cost liquidity management and reserve asset sales could further weaken the central bank’s balance sheet and undermine long-term financial stability.
“The issue is not whether stability has been achieved,” he added. “It is whether we are achieving it in a sustainable and efficient manner.”
For Dr Boako, the answer is clear: without a recalibration of policy, the cost of stability may ultimately outweigh its benefits.
