The Bank of Ghana (BoG) reported a total operating loss of GH¢9.49 billion for the 2024 financial year, marking its second consecutive annual loss after the GH¢13.23 billion loss in 2023. While these figures are staggering, the BoG maintains that it remains solvent and operationally sound.

A deeper analysis reveals that these losses were driven by strategic interventions necessary for macroeconomic stability, rather than fiscal mismanagement.

Key highlights from the 2024 Financial Report, according to the Dean of the Faculty of Accounting and Finance, UPSA, and Executive Director of Institute of Economic Research and Policy (IERPP), Prof. Isaac Boadi, revealed a reduction in operating expenses: The 2024 loss reflects a significant reduction compared to 2023, primarily due to the non-recurrence of Domestic Debt Exchange Programme (DDEP) related impairments.

The next key highlights from the 2024 Financial Report showed an improved financial metrics: Net interest income and foreign exchange gains showed positive trends. Negative equity improved by GH¢4.02 billion, from GH¢65.34 billion to GH¢61.32 billion. Persistent Challenges: Despite improvements, the BoG’s balance sheet remains under pressure, with a second consecutive year of net operating losses.

The Bank of Ghana’s 2024 financial loss of GH¢9.49 billion was primarily driven by five key factors, each of which played a critical role in the central bank’s operations. While these expenditures contributed to the reported loss, they also served broader macroeconomic and strategic objectives that supported Ghana’s economic stability.

To begin with, the interest expense of GH¢6.2 billion arose from higher yields on Bank of Ghana bills, which were issued to absorb excess liquidity from the financial system. This measure was essential for controlling money supply and preventing inflationary pressures. Although this significantly increased the BoG’s cost base, it was a deliberate policy tool to stabilize prices.

The effectiveness of this approach is evident in the sharp decline in inflation from 54.1 per cent at the end of 2022 to 23.2 per cent by the close of 2024. Thus, far from being a mere financial burden, these interest payments acted as a macroeconomic stabiliser, anchoring inflation expectations and supporting the cedi’s stability during a period of global and domestic economic uncertainty.

Moreover, the GH¢4.7 billion impairment charge was largely linked to loans extended to the government and quasi-government institutions. These impairments reflect the risks associated with lending in a challenging fiscal environment, but they also underscore the central bank’s role in supporting national financial stability.

During the IMF-backed economic reforms, these loans were critical in ensuring the continuity of essential government operations, including wage payments and debt restructuring. Without this intervention, Ghana could have faced severe fiscal disruptions, potentially leading to social unrest. Therefore, while the impairments contributed to the BoG’s losses, they were a necessary sacrifice to maintain sovereign solvency and economic order.

The personnel costs rose to GH¢1.7 billion in 2024, marking a 16 per cent increase from the previous year. This growth was driven by the BoG’s expanded workforce, particularly in areas such as financial intelligence, fintech supervision, and cybersecurity. Although these costs added to the bank’s structural expenses, they were not the primary driver of the overall loss.

More importantly, this investment strengthened the BoG’s capacity to safeguard Ghana’s financial system against emerging threats, including digital fraud and cyberattacks. In an era of increasing financial complexity, such expenditures are not optional but rather vital for national economic resilience.

Furthermore, the GH¢1.82 billion exchange loss from the Government’s Gold-for-Oil Programme, though significant, should be viewed as a strategic trade-off rather than a fiscal misstep. The initiative aimed to stabilize fuel prices, preserve foreign reserves, and ease pressure on the cedi by using gold instead of dollars for oil imports.

While currency fluctuations led to accounting losses, the programme helped cushion inflation and prevent steeper fuel and transport costs. As one BoG official explained, “Stabilising fuel prices helped anchor inflation expectations.” Hence, the loss reflects a calculated investment in macroeconomic stability during a period of global volatility.

Lastly, the BoG spent GH¢838 million on printing and minting currency, a fundamental function for ensuring smooth monetary transactions across the economy. While this expenditure contributed to the annual loss, its importance cannot be overstated.

A reliable supply of physical currency is essential for financial inclusion, especially in a country where cash remains a dominant medium of exchange. In 2024 alone, this spending facilitated over GH¢1.2 trillion in cash transactions, underscoring its critical role in maintaining public trust in the monetary system. Viewed in this light, the cost of currency management is not a wasteful expense but a foundational investment in economic activity.

BoG’s 2024 loss should not be viewed in isolation. Although GH¢9.49 billion is a striking figure, the contextual drivers were nation-saving tools rather than pure financial drains. The challenge lies not in the cost but in transparency, accountability, and results-based justification of these expenditures. With inflation down, forex markets more stable, and IMF targets met, these losses arguably reflect economic cushioning, not recklessness.