Bank of Ghana is Policy Solvent
By Praisebell Rosemond Larbi
The Minister of Finance, Dr. Cassiel Ato Forson, has commended the Bank of Ghana (BoG) for maintaining its policy solvency despite facing significant financial challenges, including nearly 60 billion cedis in negative equity. He made this statement on the floor of Parliament on March 25, 2025, during parliamentary proceedings, addressing concerns about the central bank’s financial standing and its ability to execute its mandate effectively.
Dr. Forson assured the House that despite the negative equity, the Bank of Ghana remains financially capable of carrying out its core functions. He emphasized that the institution continues to generate enough revenue to sustain its monetary policies, regulate the financial sector, and support economic stability.
The issue of the Bank of Ghana’s financial health has been a topic of national debate, particularly following reports that the institution has accumulated a negative equity position exceeding GH¢60 billion. Critics have raised concerns over the potential risks this could pose to Ghana’s economic outlook; with some suggesting that, it could undermine investor confidence and the stability of the banking sector.
However, Dr. Forson reassured Parliament and the Ghanaian public that a central bank’s negative equity does not necessarily mean insolvency. He explained that, unlike commercial banks, central banks operate differently and can continue to function effectively even when facing negative equity.
“the central bank is able to generate enough revenue to perform its monetary functions,” he stated.
Some of the factors contributing to the BoG’s current financial position, includes the impact of government debt restructuring, the depreciation of the cedi, and losses incurred in stabilizing the financial sector.
The recent Domestic Debt Exchange Programme (DDEP) significantly affected the Bank of Ghana’s balance sheet, as the central bank held a substantial amount of government bonds that were restructured. The losses incurred due to the markdown on these bonds contributed significantly to the negative equity situation.
Despite these challenges, Dr. Forson assured Parliament that the government is actively working on strategies to strengthen the Bank of Ghana’s financial position and reinforce its independence.
In his closing remarks, Dr. Forson reaffirmed the government’s commitment to ensuring the Bank of Ghana remains stable, independent, and able to execute its mandate effectively.
“The government is working closely with the central bank to implement reforms that will strengthen its financial position and ensure that it continues to function as a credible institution,” he assured. As Ghana navigates its economic recovery, all eyes will be on the government and the Bank of Ghana to see how they manage these financial challenges while maintaining stability in the country’s financial sector.
