Ghana’s aggressive strategy of accumulating foreign exchange reserves and gold carries a high fiscal cost that could erode recent improvements to the country’s public finances, S&P Global Ratings has warned, as the central bank’s balance sheet deteriorates and government prepares to issue additional debt to recapitalise the institution.
The US-based rating agency said implementing the Ghana Accelerated National Reserves Accumulation Programme (GANRAP) — a flagship policy that leverages gold to strengthen the country’s external buffers — will cause the government to incur substantial local currency costs estimated at between 0.8% and 2.6% of annual Gross Domestic Product.
A Central Pillar of Economic Strategy
GANRAP, unveiled by Finance Minister Dr Cassiel Ato Forson in February 2026, is the centrepiece of Ghana’s strategy to rebuild reserves and stabilise the cedi after the 2022 debt crisis. The policy mandates the Ghana Gold Board (GoldBod) to generate foreign exchange and support gold reserve accumulation by the Bank of Ghana, with an operational weekly gold purchase target of approximately 3.02 tonnes.
The programme’s ambition is substantial: Ghana aims to build foreign reserves equivalent to 15 months of import cover by the end of 2028, up from about 4.2 months as of August 2026, and to achieve zero raw mineral exports by 2030. Government has signed a landmark memorandum of understanding securing 30% of large-scale gold production for the national strategic reserve.
The reserve accumulation strategy has produced tangible gains. The cedi appreciated by approximately 30% against the US dollar in 2025, inflation fell to multiyear lows, and the trade surplus surged. But the fiscal machinery required to sustain that strategy is proving costly, S&P warned.
The government has sought to reduce the programme’s cost. Finance Minister Forson told Parliament the government had reduced the programme’s average cost from 14.5% to 5% of the value of gold purchased. In July 2026, the Ministry of Finance disclosed that GH¢5 billion (about US$429.6 million) would cover the cost of implementing GANRAP.
Bank of Ghana’s Deepening Losses
The cost of reserve accumulation has taken a heavy toll on the Bank of Ghana’s balance sheet. The central bank recorded an operating loss of US$1.25 billion in 2025, worsening its negative equity to 6.7% of GDP.
In local currency terms, the central bank posted an operating loss of GH¢15.63 billion for the 2025 financial year, with other comprehensive income losses of GH¢19.32 billion. Negative equity widened from GH¢61.32 billion at the start of the year to GH¢96.28 billion by year-end. The Bank of Ghana has attributed the losses primarily to the Domestic Debt Exchange Programme and monetary policy operations undertaken during the crisis years.
The government has initiated a Phased Capital Restoration Programme to recapitalise the central bank over seven years, from 2026 to 2032. A GH¢5 billion recapitalisation bond was issued in March 2026 to strengthen the Bank’s equity base, with further injections planned annually. The Bank of Ghana and the Ministry of Finance have agreed on a recapitalisation plan spanning 2026 to 2032.
S&P cautioned, however, that restoring the Bank’s capital position would likely require the government to issue additional debt. Former Finance Minister Dr Mohammed Amin Adam has warned that the central bank’s losses could add pressure to Ghana’s public debt, with recapitalisation likely to increase public debt and strain government finances.
The IMF has defended the Bank of Ghana’s position, stating that the central bank remains policy solvent despite its negative equity, and expressing confidence that full recapitalisation could be achieved by 2032 or earlier.
Gold Sector Reforms and External Shocks
The government is reforming its regulatory and tax regimes for the gold sector to reduce the fiscal burden. The centrepiece of these reforms is a transition to a dynamic sliding-scale royalty model for gold and lithium.
The new regime, which took effect in March 2026 despite opposition from China, the US, and mining executives, replaces the previous flat 5% royalty rate with a progressive scale ranging from 5% to 12%. Under the framework, miners pay 5% when gold prices are at or below US4,500 per ounce. With gold trading above US$5,000 per ounce in 2026, Ghana is currently capturing the top rate.
To cushion the impact on mining companies, the government reduced the Growth and Sustainability Levy from 3% to 1% of gold revenues, reversing an earlier increase. The Ghana Extractive Industries Transparency Initiative has cautioned that the simultaneous application of the levy and the sliding-scale royalty could push the total fiscal take from mining companies above 16% of gross production.
S&P warned, however, that external shocks — particularly the rise in international fuel prices stemming from the conflict in the Middle East — will partially offset the expected fiscal benefits of these reforms.
Inflation and Economic Resilience
The broader economic picture presents a paradox. Inflation has dropped sharply from a peak of 54.1% in December 2022 to 5% in August 2026 — a historic disinflation — but prices have begun trending upward in recent months.
The Middle East conflict has emerged as a significant threat to this progress. The closure of the Strait of Hormuz triggered sustained increases in global crude oil prices, with direct effects on fuel costs, transport fares, import bills, and consumer prices. Fuel prices at the pump increased by 15% at the beginning of April 2026, with petrol priced at GH¢13.3 per litre and diesel at GH¢17.1 per litre. The government announced fuel subsidies to protect consumers from rising costs.
Inflation rose for the first time in 16 months in April 2026, driven by the surge in global energy prices. The IMF revised its 2026 global growth projection downward to 3.1% from 3.3%, citing adverse demand and supply effects from the conflict.
S&P noted that the Ghanaian economy has demonstrated relative resilience to the economic impact of the Middle East war, although rising input costs — largely linked to higher fuel and transport prices — are starting to weigh on businesses and households.
Debt Service Remains the Binding Constraint
The rating agency’s assessment underscores a broader truth about Ghana’s post-restructuring recovery: reducing the debt stock is only one part of restoring fiscal resilience. Ghana’s public debt stood at GH¢733.9 billion as of July 2026, equivalent to 45.9% of GDP — far below crisis-era levels but still a significant burden.
The cost of servicing that debt, refinancing maturing obligations, and managing liabilities from state-owned enterprises remains central to the sovereign risk assessment. Ghana’s interest payments are forecast to average 20% of government revenue through 2029, a substantial improvement from the nearly 48% recorded in 2021 but still high by regional standards.
S&P maintained Ghana’s sovereign credit rating at B-/B with a stable outlook, reflecting the country’s gradual rehabilitation in international credit markets following its December 2022 default. The rating remains constrained by weak institutional arrangements, elevated government debt levels, and high debt service costs relative to peers.
The GoldBod Factor
The financial position of the Ghana Gold Board has also drawn S&P’s attention. The agency identified GoldBod’s fiscal costs as an area requiring continued attention, noting that the transfer of more responsibility to the state gold-buying entity shifts part of the risk toward the fiscal accounts.
GoldBod has become increasingly important to Ghana’s export and reserve strategy, but its expanding role means operational losses or financing pressures could have fiscal consequences if they require government support. In August 2026, GoldBod reported generating US646.59 million was made available to the Bank of Ghana for reserve accumulation. However, gold exports by GoldBod were paused from mid-August, a development the Bank of Ghana Governor identified as one of three key risks to the economy.
Outlook
S&P’s assessment highlights the fundamental tension in Ghana’s economic strategy: the gold-backed reserve accumulation model that has strengthened the country’s external position and stabilised the cedi is simultaneously imposing significant fiscal costs that could undermine the very improvements it seeks to achieve.
With debt payments of approximately US$9 billion due in 2027 and 2028, and the central bank requiring recapitalisation through 2032, the government faces difficult trade-offs between building external buffers and maintaining fiscal discipline. The coming years will test whether Ghana can convert its hard-won macroeconomic gains into durable economic transformation, or whether the cost of protecting those gains will prove too high.
