BoG Should Focus on Price Stability, Says IMF
Follow Nukunya
Get the latest breaking news and updates from Nukunya.
BoG Should Stick to Price Stability, Stay Out of Fiscal Territory – IMF
The Bank of Ghana needs to stay focused on what it’s actually there to do: keep prices stable. That’s the message from Dr Adrian Alter, the IMF’s Resident Representative to Ghana.
His concern is straightforward. He believes the central bank shouldn’t be wading into fiscal territory by lending to government agencies. If it needs capital, he says, the market and commercial banks are the right place to look not the government’s books.
Alter’s comments came while discussing the losses racked up by the Ghana Gold Board (GOLDBOD), speaking on Channel One TV on Monday, August 24.
He didn’t downplay gold’s importance to the economy. It’s helped boost export earnings and played a part in stabilising the cedi, which in turn helped rebuild the country’s reserves. But the domestic gold purchase programme, he argued, comes with lessons attached particularly around governance, transparency, and cost control.
According to IMF analysis, the programme has racked up significant losses for the Bank of Ghana over time. By the end of 2025, that had left the central bank with equity of negative 7 percent, and the gold purchase programme was a major contributor.
For Alter, the core issue is simple: this kind of activity is fiscal in nature, and a central bank shouldn’t be doing it. When the balance sheet takes a hit, it starts to interfere with the one job that matters most — keeping prices stable.
He broke down how that interference actually happens. Running these operations costs money — sterilisation costs, operational costs and if those costs get too high, they eat into the balance sheet. His bottom line: price stability needs to remain the central bank’s top priority, full stop.
Alter also touched on central bank independence, calling it essential to the whole picture. When fiscal dominance creeps in meaning the central bank ends up financing government spending — that independence starts to erode.
His view is that the Bank of Ghana shouldn’t be lending to government entities at all. Financing should come from markets and commercial banks instead.
He noted that gold trading operations have already shifted from the Bank of Ghana over to GOLDBOD, covering both buying and selling. With that shift in place, he said government and GOLDBOD now need to sit down and rethink the financing model carefully — figuring out how to cut costs while still getting the most out of the programme.
Related posts:
T-Bill Auction Records 162.9% Oversubscription as Yields Fall 
Bank of Ghana suspends proposed 0.75% mobile money transfer fee 
Supreme Court Halts Reinstatement of GN Savings Licence Pending Bank of Ghana Appeal 
250,000 Jobs Through Govt’s Oil Palm Plan 
ECG Trains 23 Technicians to Reduce Outages in Ashanti Region 
