For the many Ghanaians worried and questioning the scale of the Bank of Ghana’s (BoG) 2025 losses, a financial economist at the University of Ghana Business School is urging a shift in perspective that a central bank’s primary job is not to make profit, but to stabilise prices. Dr. Jabir Mohammed suggests that expecting the central bank to aggressively fight inflation and still remain profitable does not align with how monetary policy works in practice. According to the 2025 audited financial statement of the Bank of Ghana (BoG), the Central Bank ramped up its use of Open Market Operations (OMO), which is a key tool used to reduce excess money in the economy. This involves issuing short-term instruments and paying interest to banks to absorb liquidity. As the report indicated, that effort came at a steep price. Spending on these operations sank about GH¢16.7 billion in 2025, nearly doubling from the previous year, as the central bank tightened policy to bring inflation under control. At the same time, the Bank reported an overall operating loss of around GH¢15.6 billion for the year. In simple terms, the Bank was paying heavily to pull money out of the system, and that cost shows up directly as losses in its books. READ ALSO Seventeen IMF Programs: Can Ghana Finally Break the Cycle? Ghana’s Comedy Industry Finds Its Voice as Local Acts Fill Major Auditoriums AU Ministers Move to Close Infrastructure Gap as Deficit Cuts Africa’s GDP Growth Amid these costs and the controversies surrounding it, the financial economist says that is exactly how the system is designed to work. When inflation is high, a central bank must reduce liquidity, even if it means incurring losses. The alternative, doing nothing, would allow inflation to rise, eroding purchasing power, destabilising the currency, and worsening economic hardship. And the results of those costly interventions are already visible. Inflation has been on a sustained downward trend, falling sharply into single digits and continuing to ease into 2026. “Don’t expect a central bank to keep inflation down and still be a profit-making entity,” Dr. Jabir Mohammed emphasized. The losses, he suggests, are not evidence of mismanagement, but the cost of stabilisation. A central bank, unlike a commercial bank, is not designed to maximise profit. Its mandate is to maintain price stability, even if achieving that requires absorbing financial losses in the short term. He added that if the Bank of Ghana is to rebuild its balance sheet, it will likely require support that ultimately ties back to the broader economy, including inflation dynamics themselves. For him, there is a trade-off at play. Ghanaians can demand low inflation, or they can demand profits, but expecting both at the same time, especially during a recovery period, may not be realistic. Share this: Share on X (Opens in new window) X Share on Facebook (Opens in new window) Facebook Like this:Like Loading... Related