Ghana’s parliament on Thursday approved amendments to the Bank of Ghana Act, introducing stricter limits on central bank financing of the government to protect the bank’s independence, Reuters reported.
The Bank of Ghana (Amendment) Bill, 2025, prohibits the central bank from buying government securities on the primary market and redefines emergency provisions that previously allowed officials to bypass a 5% lending cap tied to the prior year’s revenues.
Under the new rules, emergencies are now limited to force majeure events such as natural disasters, presidentially declared crises, or public health emergencies.
The reforms come after criticism of heavy central bank support during the COVID-19 pandemic and its aftermath, when Ghana lost access to international capital markets, inflation surged, and the Bank of Ghana reported negative equity after extending overdrafts and other support to manage fiscal imbalances.
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The revised law bans all direct or indirect loans to the government except under clearly defined, exceptional circumstances such as temporary revenue shortfalls.
Any such advances must have repayment terms, capped limits, and require parliamentary approval.
The legislation also introduces stricter eligibility requirements for board members and enhances audit oversight, aligning with the International Monetary Fund programme agreed in 2023 to curb central bank financing, stabilise inflation, and restore investor confidence.
Finance Minister Cassiel Ato Forson told parliament the reforms would “strengthen the central bank” while preserving its autonomy.
The bill also establishes a framework for joint medium-term inflation targeting with the government.
Pending presidential approval, the amendments include provisions for the state to recapitalise the central bank to meet legal requirements.
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Image Credit: Reuters
