By Leo Nelson
Fresh concerns have emerged over the financial health of the Bank of Ghana after former Finance Minister and Ranking Member on Parliament’s Finance Committee, Mohammed Amin Adam, formally petitioned the International Monetary Fund over what he describes as growing fiscal, monetary, and governance risks hidden within the central bank’s audited 2025 financial statements.
In a detailed letter addressed to the Fund, Dr. Amin Adam warned that the financial condition of the central bank could create long term pressure on Ghana’s public finances if urgent reforms and stronger oversight mechanisms are not introduced.
The petition comes at a sensitive time as Ghana approaches the end of its Extended Credit Facility programme with the IMF and seeks to maintain investor confidence, macroeconomic stability, and fiscal discipline.
Alarm Over Worsening Negative Equity
At the center of Dr. Amin Adam’s concerns is the sharp deterioration in the central bank’s equity position. According to the published financial statements, the Bank of Ghana’s negative equity worsened significantly in 2025.
The group’s negative equity reportedly rose from GH¢58.62 billion in 2024 to GH¢93.82 billion in 2025, while the bank’s standalone negative equity climbed from GH¢61.32 billion to GH¢96.28 billion during the same period.
For the former Finance Minister, this trend raises serious questions about whether the central bank’s balance sheet repair process has truly begun.
He argued that the growing losses mean the government could eventually be forced to inject substantial public funds into the central bank through a recapitalisation programme, creating additional debt obligations at a time when fiscal consolidation remains a national priority.
Economic analysts note that while central banks can technically operate with negative equity under certain conditions, prolonged losses can weaken institutional credibility, reduce policy flexibility, and increase future fiscal burdens.
Rising Losses Despite Increased Income
Another major concern raised in the petition is the worsening operational losses posted by the central bank.
The financial statements show that the Bank of Ghana recorded a loss of GH¢15.63 billion in 2025, compared with GH¢9.49 billion in 2024.
What makes this development more troubling is that the losses occurred despite an increase in operating income.
According to Dr. Amin Adam, higher operating costs, particularly expenses linked to open market operations, foreign exchange losses, gold transactions, and valuation adjustments, significantly outweighed the gains from income generation.
He argued that this trend points to deeper structural weaknesses in the bank’s financial operations.
Financial market observers say such losses, if sustained over several years, may ultimately require government intervention, effectively transferring the burden from the central bank to taxpayers.
Open Market Operations Become Costly
A particularly troubling issue highlighted in the petition is the soaring cost of monetary policy operations.
Open market operations, which are used by central banks to control liquidity and influence inflation, reportedly cost the Bank of Ghana GH¢16.73 billion in 2025, almost double the GH¢8.60 billion recorded in 2024.
Dr. Amin Adam described this as evidence that maintaining price stability is becoming increasingly expensive.
He argued that these sterilisation costs now consume a significant share of the bank’s operating income, raising concerns about whether current monetary policy tools remain financially sustainable.
He also warned that high policy costs may indicate deeper liquidity management challenges within the financial system.
The implication, according to economists, is that the cost of fighting inflation may extend beyond financial markets into the real economy, affecting domestic production, employment, and investment activity.
Gold Transactions Raise Transparency Questions
One of the most controversial parts of the petition relates to the central bank’s gold transactions.
The Bank of Ghana reportedly recorded GH¢9.57 billion in gains from the sale of refined gold in 2025. However, the same accounts also revealed significant losses of over GH¢9 billion linked to gold related transactions.
This has raised questions about the true economic benefits of the gold programme.
Dr. Amin Adam suggested that while the gains from gold sales may have temporarily improved the bank’s income position, they may not represent sustainable or recurring revenue.
He also questioned whether the sale of approximately 18 tonnes of gold reserves was purely for reserve portfolio management or partly intended to offset deeper operational losses.
The former Finance Minister called for greater disclosure around the approval process, counterparties involved, settlement arrangements, and risk management structures governing these transactions.
Transparency advocates say such disclosures are essential for maintaining public trust and ensuring accountability in reserve management.
Policy Solvency Under Scrutiny
The Bank of Ghana has maintained that despite its accounting losses, it remains policy solvent.
The central bank reportedly presented a positive policy solvency position of GH¢5.5 billion for 2025. However, Dr. Amin Adam challenged this conclusion.
According to him, the solvency calculation included non recurring gains from gold sales. Without those gains, he argued, the underlying policy solvency position may be materially weaker and potentially negative.
This distinction matters because policy solvency measures help determine whether a central bank can continue implementing monetary policy without relying on government support.
Market participants believe greater clarity on these calculations could strengthen investor confidence and improve transparency in policy communication.
Fiscal Risks for Government
Beyond the central bank itself, Dr. Amin Adam warned that the worsening financial position of the Bank of Ghana could eventually create a major fiscal burden for government.
He noted that an existing memorandum of understanding between the Ministry of Finance and the Bank of Ghana had outlined a recapitalisation framework from 2026 to 2032.
However, the earlier recapitalisation estimates were based on a smaller negative equity position.
With losses now significantly higher, the fiscal cost of restoring the bank’s balance sheet could also increase.
If government chooses to issue bonds to recapitalise the central bank, this could raise public debt, increase future interest payments, and place additional strain on fiscal targets.
This comes at a time when Ghana is still recovering from debt restructuring and seeking to re-enter international capital markets.
IMF Engagement and Reform Questions
Dr. Amin Adam also raised concerns about the pace of reforms under Ghana’s IMF programme.
He suggested that some structural benchmarks may have weakened since the current administration assumed office in January 2025.
Although he did not provide full details, he questioned how programme implementation had continued despite what he described as slowing reform momentum.
He urged the IMF to pay closer attention to the central bank’s financial position during post programme surveillance.
Analysts say the financial health of the Bank of Ghana will remain a critical issue as Ghana moves beyond the IMF programme and attempts to sustain macroeconomic gains.
Recommendations for Immediate Action
In his petition, Dr. Amin Adam proposed several recommendations.
These include a transparent central bank recapitalisation plan, stronger disclosure of quasi fiscal operations, independent review of accounting treatments, tighter oversight of gold transactions, and the publication of a post programme fiscal risk dashboard.
He also called for continued protection against central bank financing of government deficits, arguing that such practices could undermine long term macroeconomic stability.
The petition has reignited debate over the financial sustainability of the Bank of Ghana and the broader implications for the country’s economic recovery.
As policymakers, investors, and development partners assess the central bank’s financial health, one issue remains clear. Restoring confidence in the institution will require transparency, discipline, and credible reform.