Dr. Kwasi Nyame-Baafi, Director of the Institute for Economic Research and Public Policy (IERPP), has questioned the justification for losses recorded by the Bank of Ghana, arguing that inflation targets could have been achieved without such financial setbacks.
Speaking on State of Affairs on GHOne TV, Dr. Nyame-Baafi maintained that “a loss is a loss,” stressing that the Central Bank’s financial position cannot be dismissed despite improvements in key macroeconomic indicators.
He referenced a commitment by the Bank’s leadership to reverse the institution’s losses and negative equity position, noting that such a pledge underscores the seriousness of the issue. According to him, “the promise… clearly shows that Central Bank booking losses on their balance sheet is not the right thing.”
While acknowledging that the primary mandate of the Central Bank is to maintain price stability, Dr. Nyame-Baafi questioned whether the scale of losses incurred was necessary to achieve that goal. He explained that the Bank had set an inflation target of 8 percent, with a margin of plus or minus 2 percent, meaning inflation should fall within a 6 to 10 percent range.
“The real question that we should be asking ourselves is… could we not have achieved this inflation target without incurring these significant losses?” he said, adding that “the answer, if you look at the data, is we could have.”
READ: Ghana could exhaust gold reserves in 2–3 years if current trend continues – IERPP Director
He pointed to trends in both inflation and financial losses to support his argument. According to him, losses declined from about GH¢60 billion in 2022 to approximately GH¢9.3 billion by December 2024, while inflation also dropped significantly from over 50 percent post-COVID to about 23 percent.
Dr. Nyame-Baafi further noted that projections by the IMF suggested Ghana was on course to achieve single-digit inflation of around 8 percent by the end of 2025, aligning with the Central Bank’s target range.
“If we were going to achieve this inflation target… and the losses being recorded by the Central Bank were going down… how can we therefore… justify that recording losses of about GH¢34 billion is justified,” he questioned.
He also cited improvements in other economic indicators, including GDP growth, which rose from about 0.5 percent post-COVID to approximately 5.7 percent by the end of 2024, as well as gross international reserves, which increased from around $4 billion in 2016 to about $9 billion in 2024.
READ: BoG sold gold reserves to generate artificial revenue to reduce reported losses – IERPP Director
“These are clear signs that the economy was recovering,” he said, arguing that such progress raises concerns about the necessity of the scale of losses recorded.
Dr. Nyame-Baafi emphasised that available data does not support the justification for the Central Bank’s losses, insisting that the same macroeconomic outcomes could have been achieved without incurring them.
Source: Starrfm.com.gh
