BoG Commits to Zero Financing of Budget, Targets Medium-Term Equity Recovery
The Bank of Ghana (BoG) has reaffirmed its commitment to zero financing of the government’s budget, as part of broader efforts to restore financial health and ensure policy credibility.
This assurance follows the signing of a Memorandum of Understanding (MoU) between the Central Bank and the Ministry of Finance in 2023, which formalised the BoG’s withdrawal from directly financing government deficits.
Details of the Bank’s commitment and forward-looking measures were contained in its 2024 Financial Statement, audited by Deloitte, and form part of its overarching policy solvency strategy.
According to the report, the BoG will continue to implement measures aimed at optimising its investment portfolio and operational cost structure to enhance both efficiency and profitability.
“In line with the MoU signed with the Ministry of Finance, the Bank has resolved to adhere strictly to the zero financing of the budget going forward,” the statement read.
The Central Bank further disclosed that its Board is undertaking actionable steps to restore the Bank’s equity position in the medium to long term, following the substantial impairment losses recorded in the previous year.
It stressed that the 2024 policy solvency outlook remains in line with its earlier stance in 2023—that the Bank will continue to operate efficiently and effectively on a going-concern basis while fulfilling its policy mandate.
“From a macroeconomic perspective, as macroeconomic conditions continue to improve and inflation declines toward the medium-term target, interest rates will also decline, and as a result, the cost of Open Market Operations will reduce,” the Bank stated.
The BoG added that the easing inflationary environment will also support the continued stabilisation of the local currency, further reinforcing macroeconomic stability.
The Central Bank recorded significant losses in 2022 primarily due to the domestic debt exchange programme, which affected its holdings of government bonds. However, it has since reiterated its commitment to pursuing prudent monetary policies to rebuild confidence in the economy and restore financial resilience.
