Since the redenomination of the Ghana cedi in 2007, the Bank of Ghana (BoG) has accumulated losses totalling GH¢82.79 billion, according to data compiled by JoyNews Research.
This figure starkly contrasts with the central bank’s cumulative profits of GH¢10.74 billion over the same period—highlighting a troubling gap of more than eight times the recorded profits and pointing to a systemic issue that has persisted for years.
The BoG maintained relative financial stability in the early years following the redenomination. However, this trajectory shifted in 2017, when the Bank recorded its first loss of GH¢1.6 billion within the review period. The following year (2018) saw a temporary dip in losses to GH¢793 million. But by 2022, the Bank posted a historic and unprecedented loss of GH¢60.8 billion, largely due to the government’s Domestic Debt Exchange Programme (DDEP). The downward spiral continued in 2023 with a restated loss of GH¢13.23 billion, and most recently in 2024, with an additional GH¢9.49 billion loss.
A major contributor to the BoG’s financial woes is the haircut it suffered during the DDEP—a key pillar of the government’s macroeconomic recovery framework agreed upon with the International Monetary Fund (IMF) under a $3 billion Extended Credit Facility. The restructuring of the Bank’s holdings in government securities drastically reduced their value, significantly impairing the central bank’s balance sheet.
Beyond the DDEP, the BoG has been burdened by recurring foreign exchange losses and the high costs associated with Open Market Operations (OMO). The depreciation of the cedi—driven by inflationary pressures and external shocks—has led to net valuation losses on the Bank’s FX reserves. Meanwhile, the cost of liquidity management through OMOs, crucial for controlling inflation and stabilising the money market, has risen steeply, compounding the operational deficit.
These pressures have pushed the BoG into negative equity, raising serious concerns about its long-term financial viability. Estimates indicate that the Bank would need approximately $5 billion to restore its balance sheet through recapitalisation.
To address this, four potential recapitalisation options are currently under consideration:
Direct budgetary support from the Government of Ghana
Transfers of state-owned assets to the BoG
Suspension of profit transfers from the Bank to the government until equity is restored
Utilisation of fiscal buffers created under the ongoing IMF programme
However, the government has already expressed its limitations regarding full recapitalisation through the national budget. Finance Minister Dr. Cassiel Ato Forson has cited limited fiscal space—worsened by high debt servicing, a ballooning wage bill, and outstanding arrears—as key constraints to funding the entire recapitalisation independently.
This presents a complex dilemma: a financially weakened central bank undermines monetary policy transmission, erodes investor confidence, and reduces the economy’s resilience. Yet, Ghana’s tight fiscal environment complicates any attempt to restore the BoG’s capital base without jeopardising macroeconomic stability.
For now, despite ongoing losses, the BoG has found some relief through increased foreign exchange inflows from the GOLDBOD initiative and an improved remittance framework. These developments have strengthened the Bank’s FX position, allowing it to perform key monetary responsibilities more effectively in the interim.