A policy analysis by the Centre for Economic Research and Policy Analysis (CERPA) has warned that Ghana’s growing overlap between fiscal and monetary policy could undermine the credibility and independence of the Bank of Ghana (BoG), as the central bank continues to record mounting losses linked to its policy interventions.

The think tank, in a review of the BoG’s financial performance from 2018 to 2025, argues that the central bank’s heavy exposure to government debt and involvement in quasi-fiscal operations represent a significant shift away from its traditional mandate.

“The heavy exposure to government debt and involvement in quasi-fiscal operations indicates a shift beyond traditional central banking roles,” CERPA stated in the brief.

The report comes amid ongoing public and policy debate over the central bank’s financial position, which has been strained by inflation-control measures, high interest rates, and foreign exchange pressures in recent years.

According to CERPA, the concern is not only about losses but the broader implications for policy independence. The think tank warns that persistent financial strain could weaken the BoG’s balance sheet and potentially force government intervention through recapitalisation.

“Persistent losses weaken the equity position of the central bank, potentially requiring recapitalisation by the government. This creates a fiscal-monetary interdependence that may compromise operational independence,” the brief cautioned.

The analysis suggests that such a scenario could blur the lines between fiscal policy—managed by the Ministry of Finance—and monetary policy, which is the responsibility of the central bank. CERPA argues that this growing interdependence could weaken confidence in Ghana’s macroeconomic management if not addressed.

To mitigate the risks, the think tank is calling for a structured recapitalisation plan, which could include long-term government bonds or direct budgetary support. It also recommends a clearer separation of roles between fiscal authorities and the central bank.

It further proposes that quasi-fiscal activities currently undertaken or supported by the Bank of Ghana be either phased out or transferred fully to the Ministry of Finance, allowing the central bank to focus strictly on its core mandate of price stability.

CERPA says the reforms are urgent, warning that without decisive action, the BoG’s balance sheet could remain a long-term source of macroeconomic vulnerability.

The warning adds to growing scrutiny of Ghana’s economic management framework, especially as policymakers continue to balance inflation control, currency stability, and rising public debt pressures.