By Collins Sarkodieh 
The Bank of Ghana (BoG) reported a GH¢15.6 billion operating loss in its 2025 audited financial statements, sparking intense public debate. While critics view this as institutional failure, the loss is primarily a result of aggressive monetary policy aimed at absorbing excess cash from the economy to prevent hyperinflation and protect the value of the cedi.
In the world of macroeconomics, a central bank is the “Banker” in a game of Monopoly. Unlike a commercial bank that must remain profitable to survive, a central bank’s mandate is to maintain price stability. To achieve this, the BoG utilized Open Market Operations (OMOs), paying commercial banks GH¢16.73 billion to “lock away” excess money that would otherwise drive up the cost of goods and services.
By intentionally “breaking” its balance sheet, the BoG acted as a financial shock absorber for the Ghanaian people. This GH¢15.6 billion deficit is the literal cost of mopping up excess liquidity to ensure that the price of daily essentials like bread and fuel doesn’t spiral out of reach for the average citizen.
Is the Bank of Ghana “bankrupt” because of this GH¢15.6 billion loss?
Technically, the Bank of Ghana has a negative equity of GH¢96.28 billion, but a central bank cannot go bankrupt in its own currency. Because the BoG is the sole issuer of the cedi, it can operate with negative equity while continuing to perform its core functions of managing inflation and stabilizing the financial system.
Standard corporate accounting rules do not apply to the soul of a central bank. If a private company loses money, it eventually collapses; if a central bank “loses” money through OMOs, it is often because it is removing dangerous amounts of cash from circulation to protect the national currency’s purchasing power. The current negative equity is a legacy of the 2022 Domestic Debt Exchange Programme (DDEP), where the BoG swallowed a 50% “haircut” on GH¢67 billion of government debt to save the state from total insolvency.
The BoG is essentially the engineer of a massive reservoir system. Even if its own ledgers show a deficit, its primary job is to ensure the “flood” of excess money doesn’t wash away the economy. As long as it maintains its mandate of price stability, its paper losses are secondary to national survival.
Where did the GH¢15.6 billion go?
The vast majority of the GH¢15.6 billion loss went into Open Market Operations (OMOs), which cost the bank GH¢16.73 billion in 2025 alone. This money was paid as a fee to commercial banks to convince them to park their excess cash at the central bank instead of lending it out or using it to buy dollars.
If the BoG did not pay this GH¢16.7 billion “mop-up” fee, those billions of cedis would have flooded the market. This surge in money supply would have chased a limited supply of goods and foreign exchange, causing the cedi to depreciate rapidly and inflation to skyrocket. In simple terms, the BoG spent this money to keep your money valuable.
It is helpful to think of the OMO expense as a necessary utility bill. Just as a city pays for drainage to prevent flooding, the central bank pays for OMOs to prevent a “liquidity flood” from drowning the economy in inflation.
Why is the BoG “breaking” its balance sheet to save the price of bread?
Under Section 3 of the Bank of Ghana Act, the bank’s overriding goal is to maintain price stability, not to make a profit. If the BoG tried to be profitable by stopping OMOs, inflation would hit catastrophic levels, making basic needs like bread unaffordable for the working class.
The BoG chose to “bleed” on its balance sheet so the nation wouldn’t “hemorrhage” economically. The GH¢15.6 billion isn’t “missing” money; it is effectively a massive subsidy on the cost of living. By absorbing the cost of liquidity management, the bank shielded citizens from the full, crushing weight of a sovereign debt crisis.
In the grim arithmetic of a financial crisis, an institutional loss is often the only way to avoid a national collapse. The BoG’s deficit is the price Ghana pays for a semblance of stability in a post-DDEP landscape.
Factual Insights into the Bank of Ghana’s 2025 Financials:
- Operating Loss: The Bank of Ghana recorded a staggering operating loss of GH¢15.6 billion for the 2025 financial year.
- OMO Expenditure: The bank spent GH¢16.73 billion on Open Market Operations (OMOs) in 2025, nearly doubling the amount spent in the previous year.
- Total Negative Equity: Following the 2022 debt crisis, the BoG’s negative equity has swollen to GH¢96.28 billion.
- The 2022 Shock: The structural rupture began in 2022 when the BoG took a 50% “haircut” on GH¢67 billion of government securities during the DDEP.
- Statutory Mandate: According to Section 3 of the Bank of Ghana Act, the bank’s primary objective is price stability, not profit generation.
- Currency Issuer Status: As a monopoly issuer of fiat currency, the BoG cannot “go bust” in its own local currency.
- Liquidity Control: The GH¢16.7 billion OMO expense is designed to trap excess money in commercial bank “reservoirs” to prevent cedi depreciation.
What is the “Original Sin” of the Bank of Ghana’s deficit?
Critics argue that the BoG is only paying these high OMO fees because it previously “printed” money to finance government spending before 2023. This practice, known as fiscal dominance, created the very excess liquidity the bank is now spending billions to “mop up.”
While it is fair to hold the bank accountable for past actions, the 2025 loss represents the necessary cost of the cleanup. Think of it like this: if a cleaner leaves a tap running and floods a hallway, we should be angry at the mess. However, screaming at the cleaner for “wasting money” on expensive mops while the floor is still underwater is counterproductive.
The OMO expense is the mop. The “Original Sin” of printing money made the floor wet, but the 2025 operating loss is the only way to dry it before the foundation of the economy rots.
How does negative equity affect the average Ghanaian?
On paper, negative equity looks like an institutional death spiral, but for the average Ghanaian, it means the central bank is absorbing the losses that would otherwise hit their pockets. If the BoG didn’t carry this negative equity, the state would likely have to impose even harsher taxes or allow inflation to wipe out personal savings.
A central bank with negative equity can still be effective if it maintains independence and follows sound monetary policy. The BoG’s priority remains keeping the cedi stable enough so that businesses can plan and families can afford to eat.
The real danger isn’t the BoG’s balance sheet; it’s the threat of unmanaged inflation. As long as the “Banker” keeps the game alive, the institution can eventually rebuild its equity once the wider economy stabilizes and government debt becomes sustainable again.
Can the Bank of Ghana return to profitability?
Yes, the Bank of Ghana can return to a healthy equity position over time as the effects of the Domestic Debt Exchange Programme (DDEP) fade and the government achieves fiscal discipline. Profitability, however, should never come at the expense of its price stability mandate.
As inflation trends downward, the cost of OMOs will likely decrease, allowing the bank to stop “bleeding” cash. The road to recovery depends on the sovereign state (the government) sticking to its side of the bargain by not forcing the central bank to finance deficits in the future.
For now, the focus is on stabilization. The BoG is choosing to prioritize the “macroeconomic soul” of the nation over a pretty balance sheet, ensuring that the cedi remains a viable medium of exchange for 30 million Ghanaians.