Editorial: BoG’s Mounting Open Market Losses Signal Urgent Need for Financial Reset

The Bank of Ghana (BoG) reported an alarming GH¢9.49 billion operating loss for 2024, with its open market operations (OMO) accounting for the lion’s share—GH¢8.6 billion. This figure marks a slight increase from GH¢8.37 billion in 2023, underlining the persistent cost burden of sterilisation tools used to manage liquidity in the economy.

In a bid to curb inflation and stabilise the macroeconomic environment, the BoG absorbed GH¢134 billion in excess liquidity in 2024, equivalent to 1.7% of GDP. While these efforts were critical to maintaining financial stability, they did not significantly influence GDP growth.

Instead, Ghana’s 5.7% GDP growth in 2024 was driven by strong performances in the industrial (7.1%), services (6.1%), and agriculture (2.8%) sectors—fueled by mining, construction, crop production, and digital services—rather than monetary interventions.

Inflation remained high, fluctuating between 23% and 25%, but relatively stable. Despite a narrowing gap in sterilisation activities, BoG ramped up its liquidity management in 2025, absorbing GH¢15.5 billion in February, GH¢21.6 billion in March, and a record GH¢33.3 billion in April—an indication that inflation containment remains a priority.

Compounding the central bank’s financial woes was its participation in the Gold for Oil (G4O) initiative. The BoG invested GH¢4.69 billion in seed capital but registered a GH¢1.82 billion loss from the programme in 2024 alone. Cumulative losses now exceed GH¢2.1 billion, prompting the board to approve BoG’s withdrawal from the initiative in March 2025.

In response to these persistent losses, the BoG, the Ministry of Finance, and the International Monetary Fund (IMF) signed a Memorandum of Understanding on 6 January 2025, outlining a recapitalisation plan aimed at restoring the central bank’s financial stability and preserving its operational independence.

Crucially, under the terms of the ongoing IMF programme, the BoG has pledged to uphold the zero-financing agreement with the Ministry of Finance, refraining from direct monetary support to the government—a vital step to reinforce fiscal discipline and protect the credibility of monetary policy.