Bank of Ghana reports GHS 15.6 billion financial cost in 2025

Ghana’s central bank reported a GHS 15.6 billion financial cost in 2025. This cost stems from decisive actions to stabilize the economy after the severe 2022 crisis.

This financial outcome was not an economic failure. It instead represents the cost of a significant stabilization turnaround. Aggressive liquidity tightening, including GHS 16.7 billion in Open Market Operations (OMO), was crucial to pulling excess money from the system. This also involved costs associated with the Domestic Gold Purchase Programme.

The actions taken were in response to Ghana's macroeconomic framework facing extreme pressure in late 2022. Inflation soared to 54.1 percent, and the cedi depreciated sharply. Confidence in markets was low, and excess liquidity fueled inflation and exchange rate instability. Ghana ended 2024 with a fiscal overspending of GHS 36 billion, equivalent to 3.1 percent of GDP. This overspending threatened the economy's fragile recovery.

The Bank of Ghana's mandate, under Section 3 of Act 612 (Bank of Ghana Act, 2002), prioritizes price and currency stability over profitability. Therefore, this financial cost reflects a strategic decision to achieve these core objectives. Mawuli K. Nyamadzi noted that treating the financial cost in isolation is a significant error, as it ignores the positive outcomes. He states, "The 'loss' recorded in 2025 was not an economic failure. It was the financial cost of delivering one of the most decisive stabilisation turnarounds."

The central bank's interventions led to a significant drop in inflation, from 23.8 percent to 5.4 percent, and further to 3.2 percent by March 2026. This sharp decline restores predictability for households and businesses. The cedi appreciated by 40.7 percent, reducing import costs and saving an estimated GHS 60 billion for households and firms. Government finances also improved, with over GHS 12 billion saved on foreign exchange-linked expenditures. Public debt dynamics improved, decreasing from 61.8 percent to 45.3 percent of GDP. These measurable national gains demonstrate the policy's effectiveness in restoring economic stability and confidence across markets. Lending rates have also started to ease, indicating returning market confidence.

A significant portion of the reported cost, GHS 29.1 billion, came from foreign exchange revaluation. This was a mechanical accounting effect of a stronger cedi, not a cash loss. For example, a $100 asset valued at GHS 1,470 previously is now GHS 1,045 due to currency appreciation. The GHS 9.1 billion cost for the Domestic Gold Purchase Programme (DGPP) is an investment. This program increased Ghana’s reserves from $9.1 billion to $13.8 billion, a historical high. These robust reserves provide approximately 5.7 months of import cover, strengthening Ghana's external position. These figures underscore the trade-off inherent in achieving macroeconomic stability during a crisis.