The Majority Caucus in Parliament has described the Bank of Ghana’s 2025 financial losses as “crisis insurance” that protected Ghana’s private sector from collapse during one of the most turbulent economic periods in the country’s history.
The Chairman of Parliament’s Committee on Economy and Development and Member of Parliament for Amenfi West, Eric Afful, who addressed a press conference in Accra on Tuesday, May 5, 2025, on behalf of the Majority Caucus on the implications of the Bank of Ghana’s latest financial results, said the losses recorded by the central bank must be understood as a deliberate transfer of economic shock away from businesses and households and onto the public balance sheet.
“In times of severe crisis, someone must absorb the shock. In this case, the Bank of Ghana took that burden so Ghanaian businesses would not collapse under inflation, currency instability and prohibitive borrowing costs,” he explained.
The Bank of Ghana recorded a net loss of GH¢15.6 billion in 2025 and a further deterioration in its equity position, figures that have sparked public concern. However, Mr Afful argued that judging the central bank purely on profit-and-loss metrics misses the essence of its role during economic emergencies.
According to the Amanfi West MP, runaway inflation between 2022 and 2024 pushed many businesses, particularly small and medium-sized enterprises, to the brink as operating costs surged and consumer demand weakened.
“The inflation fight was expensive for the Bank, but it was lifesaving for businesses. Allowing prices to spiral further would have wiped out firms’ working capital and destroyed livelihoods,” he noted.
Through aggressive liquidity management and monetary tightening, the Bank succeeded in bringing inflation down to single digits by the end of 2025.
Mr Afful said this achievement restored predictability to the business environment, enabling firms to price goods realistically, manage payrolls and resume investment decisions.
“The cost appeared as losses on the Bank’s books, but the benefit showed up in factories staying open, shops restocking, and services continuing,” he added.
Mr Afful also pointed to the dramatic appreciation and stabilisation of the Ghana cedi in 2025 as a key relief for the private sector. Years of currency depreciation had inflated import bills and ballooned foreign-currency debt obligations for businesses.
“When the cedi strengthened, companies importing inputs immediately felt the relief. Those currency movements created accounting losses for the Bank, but they saved businesses from insolvency and default,” he underscored.
He noted that without the Bank’s interventions in the foreign exchange market, many import-dependent firms would have folded under the weight of volatile exchange rates.
The Chairman further explained that the Domestic Debt Exchange Programme, which reduced the Bank’s interest income and contributed to its losses, also functioned as a stabiliser for the private sector.
“Restoring debt sustainability was critical,” Mr Afful said, adding, “If government borrowing pressures had continued unchecked, credit to businesses would have completely dried up.”
While acknowledging the hardship imposed on bondholders, he said the programme helped lower systemic risk, eased interest rate pressures, and created space for banks to gradually re-engage with private sector lending.
Mr Afful emphasised that central banks are fundamentally different from commercial institutions and should be assessed on outcomes rather than balance sheet strength alone.
“A central bank’s losses during crisis periods are not a sign of failure; they are a sign of intervention. They represent economic insurance paid upfront to avoid a far greater collapse later,” he noted.
He pointed to improving economic indicators in 2025, including lower inflation, stronger reserves, easing interest rates and renewed growth, as evidence that the strategy worked.
“For businesses, what mattered was survival,” he said. “And because the Bank of Ghana took the hit, many businesses survived.”
