BoG Loss Saved Businesses From Collapse –Majority

The Majority Caucus of Parliament has said the financial losses recorded by the Bank of Ghana (BoG) in 2025 were a decisive factor in preventing widespread business collapse and deeper economic hardship across the country.

Addressing a news conference in Accra on Tuesday, May 5, 2026 the Chairman of Parliament’s Committee on Economy and Development and Member of Parliament for Amenfi West, Eric Afful, argued that the BoG’s negative equity position should be understood not as institutional failure, but as the price paid to stabilise the economy and protect Ghanaian enterprises during an exceptionally difficult period.

“The Bank of Ghana absorbed the shock so Ghanaian businesses would not collapse. If these losses had not been incurred through decisive policy interventions, many firms, especially small and medium-sized enterprise would simply not have survived,” Eric Afful noted.

The BoG reported a net loss of GH¢15.6 billion in 2025, alongside deterioration in its equity position.

These figures have triggered renewed public debate with many, especially the opposition New Patriotic Party (NPP) and the Minority Caucus, arguing that the actual Bank of Ghana loss is GHS44billion.

However, Mr. Afful maintained that focusing solely on the accounting numbers ignores the broader impact of the Bank’s actions on the real economy.

According to the Amenfi West MP, one of the most significant benefits to Ghanaians and businesses is the sharp reduction in inflation, which had previously driven up production costs and eroded consumer spending.

“High inflation was choking businesses. Prices were rising faster than incomes, demand was collapsing and margins were being wiped out,” he said.

The Amenfi West MP added that “by aggressively tightening monetary conditions, the Bank brought inflation down to single digit, giving businesses room to recover and plan again.”

Mr Afful noted that the cost of open market operations (OMO), which contributed heavily to the BoG’s losses, was necessary to mop up excess liquidity and prevent a full-blown price spiral that could have crippled firms across manufacturing, trade and services.

He also pointed to the sharp appreciation of the Ghana cedi in 2025, as a “lifeline” for businesses dependent on imported inputs or servicing foreign currency obligations.

“When the cedi stabilised and strengthened, businesses importing raw materials, machinery and fuel got immediate relief,” Mr. Afful said, adding “Yes, the Bank recorded valuation losses on its foreign assets, but those same movements saved companies from massive exchange losses that would have pushed them into insolvency.”

Mr Afful further argued that the Domestic Debt Exchange Programme (DDEP), while reducing the Bank’s interest income, was critical in easing pressure on interest rates and supporting private sector credit.

“Without restoring debt sustainability, government borrowing would have crowded out businesses completely. The pain was shared, but the alternative would have been far worse – a total freeze in credit and widespread business failures,” he underscored.

While acknowledging the hardship the programme caused, particularly for some bondholders, he said it ultimately prevented the collapse of the financial system on which businesses depend.

The Chairman of the Committee on Economy and Development emphasised that central banks do not operate like commercial entities and should not be judged by profit alone.

“Central banking losses in times of crisis are like an insurance premium. The Bank of Ghana’s balance sheet took the hit so factories could keep operating, traders could restock, jobs could be preserved and confidence could return,” he noted.

He pointed to improving indicators such as lower inflation, stronger reserves, easing interest rates and renewed growth as evidence that the strategy worked.

“As Legislators, our responsibility is to look beyond headlines. The real story is not the loss on the BoG’s books, but the businesses that are still standing today, because the Bank stepped in when the economy needed it most,” he stressed.

Mr. Afful said Parliament would continue to exercise its oversight role while supporting efforts to recapitalise the central bank over the medium term, noting that a stable and credible BoG remains essential for sustained private sector growth.

By Stephen Larbi

 

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