In periods of economic difficulty, the role of a central bank becomes both more visible and more misunderstood. Much of the recent discussion around the Bank of Ghana has focused on the costs associated with its policy actions. Yet this framing risks missing a fundamental point: central banks are not profit-making institutions. Their primary mandate is to ensure price stability, maintain confidence in the currency, and safeguard the financial system. These are public goods and are no different in principle from the infrastructure governments provide to improve the daily lives of citizens.

Governments routinely spend significant resources to build roads, repair bridges, and provide essential services without any expectation of direct financial return. Citizens do not measure the success of a highway by its profitability; they measure it by how much easier it makes movement, trade, and economic activity. In much the same way, the Bank of Ghana’s policies should be evaluated not by whether they generate accounting profits, but by whether they restore stability to prices, reduce uncertainty, and improve economic conditions. As Christine Lagarde (President of the European Central Bank) aptly noted, “Our job is not to make profits, but to maintain price stability.” This distinction is critical in analysing the operations of any central bank.

Ghana’s recent experience underscores this reality. The country emerged from a period of elevated inflation, currency volatility, and declining confidence, conditions that directly affected households through rising cost of living and eroding purchasing power. Inflation, which stood at 23.8% at the end of 2024, declined sharply to 5.4% by December 2025 and further toward 3.3% in early 2026. Lending conditions have improved significantly, with average lending rates falling from about 30.25% in December 2024 to around 20.45% by December 2025, while the Monetary Policy Rate declined from 29% in January 2025 to about 14% by March 2026. The exchange rate has also stabilised, with the cedi strengthening from levels near GH¢17 to the dollar at its peak to around GH¢10–11, easing the cost of imported goods and restoring predictability for businesses. These are not abstract indicators; they represent real relief for households and firms across the economy.

Achieving this outcome required decisive interventions, particularly through Open Market Operations (OMOs). To reduce inflation, the Bank of Ghana absorbed excess liquidity from the financial system by issuing short-term instruments and paying interest on them. The cost associated with these operations rose from about GH¢8.6 billion in 2024 to approximately GH¢16.7 billion in 2025. On paper, this appears as a financial expense. In economic terms, however, it is the cost of stabilisation. Without these measures, excess liquidity would have continued to fuel inflation, imposing a far greater burden on households through rising prices and diminished purchasing power. In effect, the central bank absorbed this cost so that citizens would not bear it directly.

A similar dynamic applies to the strengthening of Ghana’s external position. As the cedi stabilised and appreciated, imported goods from fuel to food became more affordable, reducing pressure on household budgets and business costs. Yet this same appreciation generates accounting costs on the Bank’s books. When the cedi strengthens, foreign assets held in dollars appear lower when expressed in cedi terms, creating valuation effects. These are not real losses, but accounting adjustments that reflect the very stability benefiting the wider economy, hence captured under Other Comprehensive Income (OCI).

The Bank’s gold reserve programme further illustrates how policy benefits can carry accounting implications. By purchasing gold locally and building reserves through domestic production, Ghana has reduced its reliance on external borrowing. This strengthens economic sovereignty and creates a more sustainable reserve base. However, because gold is purchased at prevailing market dollar rates but recorded at the Bank’s official exchange rate, a gap emerges that appears as an accounting cost. The gold itself remains fully intact. There is no loss of value, only a difference in how it is recorded.

Similarly, the Domestic Debt Exchange Programme (DDEP) contributed to the Bank’s financial position by reducing the income it earns on government securities, estimated at GH¢13 billion annually, and over GH¢26 billion across two years. This represents foregone income, not a cash loss, and reflects the Bank’s role in supporting broader fiscal stabilisation. In effect, the central bank shared in the burden of restoring macroeconomic balance.

This perspective is well-grounded in economic theory. As Milton Friedman (American Economist and Statistician) famously observed, “Inflation is taxation without legislation.” Left unchecked, inflation imposes a silent but pervasive burden on households, eroding wages, diminishing savings, and distorting economic decision-making. By acting decisively to bring inflation down, the Bank of Ghana has effectively shielded citizens from this hidden tax. In this sense, the costs incurred by the central bank can be seen as a transfer of burden away from households and onto its own balance sheet.

Global experience reinforces this interpretation. Central banks such as the European Central Bank and the Bank of England have reported significant accounting costs in recent years as a direct result of policies aimed at stabilising their economies. These outcomes have not been viewed as failures, but as necessary consequences of fulfilling their mandates.

Ultimately, the Bank of Ghana’s actions can be understood in the same way as public investment in infrastructure. Just as a bridge enables economic activity by connecting communities, effective monetary policy enables economic stability by anchoring prices and expectations. Both require resources. Both may appear costly in the short term. But both are essential for long-term prosperity. The true measure of success is not whether a profit was made, but whether the lives of citizens are improving and on that measure, Ghana’s recent stabilisation is increasingly compelling.