A Chartered Accountant, Francis Abudu Zimmaleh, has cautioned against the politicisation of the Bank of Ghana’s financial statements, stressing that the institution’s reported losses reflect policy interventions and accounting standards rather than insolvency.
He said discussions around the central bank’s recent financial performance had become increasingly politicised, with many interpretations failing to appreciate the technical nature of central banking operations and financial reporting frameworks.
Speaking in an interview with the media, Mr Zimmaleh explained that central bank losses were often the result of deliberate policy actions, particularly during periods of economic instability.
“Losses recorded by central banks do not necessarily indicate failure or poor management. They are frequently the accounting outcome of measures taken to stabilise the economy,” he noted.
He attributed the Bank of Ghana’s losses between 2022 and 2025 largely to the Domestic Debt Exchange Programme (DDEP), exchange rate fluctuations, and the cost of monetary tightening aimed at controlling inflation.
Mr Zimmaleh highlighted the role of International Financial Reporting Standards (IFRS), particularly exchange rate accounting rules, in shaping how such losses are recorded.
He explained that under these standards, fluctuations in currency values can lead to accounting gains or losses on foreign reserves, even when those reserves are not liquidated.
“For instance, when the cedi appreciates against major currencies, the cedi value of foreign reserves declines on paper, resulting in reported losses,” he said.
According to him, the DDEP significantly affected the central bank because it held government bonds that were restructured and subsequently lost value.
He added that the Bank also incurred substantial interest costs through liquidity management operations designed to reduce inflationary pressures and stabilise the macroeconomic environment.
These developments, he said, resulted in a negative equity position, where liabilities exceed assets on paper.
However, he emphasised that such a situation does not carry the same implications as it would for a commercial bank.
“A central bank operates under a different framework. It has sovereign backing and the authority to issue currency, which means it cannot be treated like an ordinary financial institution,” he explained.
Mr Zimmaleh also addressed concerns regarding differences in financial reporting, particularly between profit-and-loss accounts and Other Comprehensive Income (OCI).
He noted that certain valuation changes involving gold reserves, Special Drawing Rights (SDRs), and foreign securities were recorded under OCI in line with provisions of the Bank’s governing laws.
While some critics argue that this approach understates the Bank’s losses, he said the central bank maintains it is applying permissible accounting treatments.
On the Domestic Gold Purchase Programme (DGPP), Mr Zimmaleh explained that the Bank recorded accounting losses due to exchange rate differences between market-based purchases and official valuation rates.
“These are policy-driven costs aimed at building reserves and curbing gold smuggling, not speculative losses,” he said.
He disclosed that cumulative losses from the programme between 2022 and 2024 exceeded GHS7 billion, contributing to the Bank’s reported net loss of GHS15.63 billion in 2025 and a negative equity position of GHS93.82 billion.
He noted that differing interpretations of these figures had fuelled public debate, particularly regarding whether non-cash OCI adjustments should be included in the total loss assessment.
While some government officials maintained that operational losses stood at about GHS15.6 billion, others argued that total losses exceeded GHS34.9 billion when broader accounting adjustments were considered.
Mr Zimmaleh referenced assessments by the International Monetary Fund, which identified quasi-fiscal losses linked to gold operations but clarified that such costs reflected policy interventions rather than institutional inefficiency.
He added that the IMF had recommended that such costs be absorbed through the national budget instead of the central bank’s balance sheet.
Despite these losses, he noted that the programme contributed to strengthening Ghana’s external reserves, which rose to approximately US$13.8 billion, equivalent to about 5.7 months of import cover.
He also indicated that gold-related operations generated an estimated US$3.8 billion in foreign exchange inflows.
Mr Zimmaleh said the Bank had since exited direct gold trading activities in 2026, allowing the Ghana Gold Board to take over gold purchases, refining and exports.
He explained that the move would enable the central bank to refocus on its core mandate while reducing accounting distortions linked to trading activities.
He stressed that the primary concern for a central bank should be maintaining confidence in the currency and financial system, rather than profit generation.
“The Bank of Ghana’s mandate is not to make profits but to ensure price stability, exchange rate stability, and financial sector resilience,” he said.
Mr Zimmaleh cautioned political actors against selectively interpreting financial data to support partisan narratives.
He observed that while some downplay the losses as technical adjustments, others exaggerate them as evidence of economic failure.
“Both perspectives oversimplify a complex issue and risk misleading the public,” he said.
He urged policymakers, journalists and the public to focus on evaluating the Bank’s performance based on its ability to achieve core policy objectives, including inflation control and macroeconomic stability.
He also called for improved transparency, enhanced public financial literacy, and independent technical reviews to strengthen understanding of central bank reporting.
“Confidence in central banking is built on transparency, credibility and informed public discourse, not political rhetoric driven by accounting headlines,” he added.
