An Assistant Professor of Economics at Niagara University in New York, USA, Dr. Dennis Nsafoah, has stated that he agrees with an aspect of the Bank of Ghana’s argument that despite the accounting losses, the institution remained financially capable of implementing monetary policy effectively.

According to him, central banks should not be evaluated solely on the basis of accounting profits and losses.

In an article titled “Large accounting losses, but is the Bank of Ghana truly policy solvent?” Dr. Nsafoah said unlike commercial banks, central banks exist primarily to maintain macroeconomic stability, preserve price stability, anchor inflation expectations, and sustain monetary credibility. “Consequently, the more important question is not whether a central bank records accounting losses, but whether it remains operationally capable of implementing credible stabilization policy”.

In its 2025 Financial Report, the Bank of Ghana reported very large accounting losses, including a comprehensive loss of approximately GH¢34.95 billion, a net operating loss of approximately GH¢15.63 billion, and a deepening negative equity position.

Policy Solvency

Dr. Nsafoah pointed out that he disagrees with the Bank of Ghana’s specific attempt to demonstrate policy solvency using its 2025 calculations, arguing that the Bank’s reported positive policy solvency position depended heavily on realized gains from gold reserve sales. “Once these one-time gains are excluded, the Bank’s own accounting framework shows that recurring operating income was insufficient to fully cover recurring monetary policy implementation costs. Under the Bank’s own accounting framework, the institution would therefore still be policy insolvent”.

Nevertheless, he argued that the policy solvency should not ultimately be evaluated through narrow accounting calculations alone. “Instead, policy solvency should be evaluated through macroeconomic outcomes and the ability of the central bank to credibly and sustainably maintain monetary and macroeconomic stability”.

Substantial Accounting Deterioration

He went on to state that the figures reported by the Bank of Ghana clearly demonstrate substantial accounting deterioration in the Bank’s balance sheet position.

“Importantly, these losses cannot simply be ignored or dismissed as irrelevant”, saying the “persistent accounting losses can eventually weaken institutional credibility, increase fiscal dependence, complicate recapitalisation needs and reduce confidence in the central bank’s long-run financial position.

Accordingly, the Bank’s accounting losses are both real and significant.