Economist Urges Debate on Commercializing Ghana Central Bank After Losses

Economist and legislator Dr. Gideon Boako has called for a national debate on potentially commercializing operations at Ghana’s central bank, the Bank of Ghana (BoG), to address its persistent financial losses.

This proposal follows the BoG reporting its third consecutive annual deficit, with a GHC 9.49 billion loss for 2024. Previous losses included an unprecedented GHC 60 billion in 2022, largely attributed to the Domestic Debt Exchange Programme (DDEP), and approximately GHC 13 billion in 2023.

Dr. Boako, who is the legislator for Tano North and a former technical advisor, emphasized that central banks globally are not inherently designed as profit-making entities.

He stated their core functions—currency issuance, maintaining price stability, and safeguarding financial stability—constitute essential “public goods” delivered without direct charges.

“It is not out of place for a Central Bank to record losses, especially when the losses are basically due to operational expenses by the bank,” Boako explained. “It is high time we distinguish central banks from typical profit-oriented corporations, such as commercial banks.

Unlike commercial banks and other profit-oriented corporations, central banks provide public goods, and their services are not charged for.” He noted currency is distributed freely and users do not pay for financial stability benefits.

However, acknowledging significant public concern and political scrutiny over the BoG’s sustained losses, Dr. Boako suggested Ghana reevaluate this traditional model.

He proposed exploring the possibility of the BoG operating on commercial lines, potentially charging for specific services. “Central banks in some countries have begun charging citizens for these services,”

Boako stated. “Perhaps we should engage in a debate in Ghana to consider this possibility.” He clarified that providing these public goods requires substantial resources, meaning central banks focus on minimizing losses rather than maximizing profits.

Some economists and analysts warn that ongoing losses could threaten the BoG’s capacity to effectively supervise Ghana’s financial system, posing long-term risks to the broader economy.

Dr. Boako framed his idea as an invitation for dialogue rather than a firm recommendation, urging policymakers, economists, and the public to discuss the BoG’s financial future. This debate centers on balancing a central bank’s public service mandate against the need for operational sustainability.