The Minority in Parliament has strongly criticised the Bank of Ghana’s (BoG) ongoing sterilization policy, describing it as harmful to economic growth and urging the adoption of more innovative strategies to manage inflation.
Ranking Member on Parliament’s Economy and Development Committee and MP for Ofoase Ayirebi, Kojo Oppong Nkrumah, revealed in a social media post that since January 2025, the Central Bank has sterilized over GHS60 billion from the economy on the assumption that there was excess liquidity.
Sterilization, a monetary policy tool, involves withdrawing excess money from circulation to slow down demand and curb inflation. The Bank of Ghana has argued that by reducing the cash available for spending, demand pressures are eased, helping to stabilise prices.
However, Oppong Nkrumah contends that the current scale of sterilization is counterproductive, as it denies businesses access to critical capital, undermines productivity, and weakens private-sector growth.
“From January till now, the central bank has admitted to us that they have mopped up over 60 billion Ghana cedis from the economy. When that money is packed at the Bank of Ghana, it is not available for demand, so prices won’t rise that quickly. But this is one of the artificial ways of controlling inflation,” he explained.
He further highlighted that the sterilized amount is nearly half of the Ghana Stock Exchange’s total market capitalization, which currently stands at just over GHS130 billion. “If you sterilize 62 billion and compare it to our total stock market capitalization, you will see the scale of the problem. We cannot continue packing liquidity at the central bank while businesses starve of capital,” he warned.
As an alternative, the Minority has proposed that part of the sterilized funds be channelled into productive investments such as the Venture Capital Trust Fund. The Fund, established under President John Agyekum Kufuor, is designed to provide equity financing for startups and small businesses, allowing entrepreneurs to access funds without interest-bearing loans.
“Young people with great business ideas could access equity capital. If these funds are deployed through the Venture Capital Trust Fund, they can help entrepreneurs expand operations, create jobs, and grow the economy. That is far more beneficial than simply sterilizing liquidity,” Oppong Nkrumah stressed.
He also suggested that resources could be directed into the stock market to support zero-coupon equity financing for existing businesses, enabling them to scale up production and generate employment.
The Ofoase-Ayirebi legislator cautioned that relying solely on sterilization is only a temporary fix. “Eventually, when you release that money back into the economy, inflation will pick up again. So this old economic orthodoxy of just sterilizing money and packing it at the Bank of Ghana is not sustainable. What we need is a broader and better strategy that supports growth while managing inflation,” he said.
The Minority is therefore urging the government and policymakers to balance inflation control measures with bold initiatives that drive sustainable growth, job creation, and private-sector expansion.
