The Institute of Economic Affairs (IEA) says about 90 percent of the reported GH¢1.7 billion loss under the Bank of Ghana’s Domestic Gold Purchase Programme (BGPP) is attributable to exchange-rate valuation differences rather than an actual cash loss.
Director of Research at the IEA, Professor Alexander Bilson Darku, said the reported figure must be properly disaggregated before conclusions are drawn about the performance of the Ghana Gold Board (GoldBod).
“The reported GH¢1.7 billion comprises service fees, assaying fees and foreign-exchange valuation differences,” he said.
Prof. Darku was speaking at the IEA’s assessment of the 2026 Mid-Year Budget Review, held on the theme, “From Stabilisation to Transformation.”
BoG Loss, GoldBod Revenue
Prof. Darku rejected the classification of service and assaying fees as losses, arguing that they represent payments made by the Bank of Ghana to GoldBod for services rendered and therefore constitute revenue to GoldBod.
“I don’t understand why somebody would call revenue as a loss,” he said.
He explained that GoldBod purchases gold on behalf of the Bank of Ghana, with export proceeds received in dollars and converted into cedis using the central bank’s reference exchange rate.
According to him, fluctuations in the exchange rate between the purchase and valuation dates create accounting differences that are recorded as losses in the Bank of Ghana’s books.
“It is merely a book accounting issue, and not a significant loss to the nation,” he stressed.
Prof. Darku further argued that, at the consolidated government level, what is recorded as a loss to the Bank of Ghana could represent a corresponding gain to GoldBod since both are public institutions.
“To the Government, its monetary authority has made that loss. To the Government, its Gold Board has made that gain,” he said.
IEA Credits GoldBod for Cedi Stability
The IEA also credited GoldBod with helping to increase gold exports, foreign-exchange inflows and international reserves, which it said had contributed to the appreciation and relative stability of the cedi.
Prof. Darku said a stronger cedi reduces import costs, helps ease inflationary pressures, supports lower interest rates and reduces the cedi value of Ghana’s foreign-denominated debt.
New Financing Model Needs Scrutiny
Despite challenging the characterisation of the GH¢1.7 billion as a loss, Prof. Darku said GoldBod’s transition from Bank of Ghana financing to private-sector funding requires transparency, prudent management and strong oversight.
He said the new financing arrangement should also be structured to contribute to the development and deepening of Ghana’s capital markets.
Prof. Darku further urged GoldBod to evolve beyond being primarily a gold trader into a strategic asset manager.
IEA Warns Against Over-Reliance on Gold
The IEA cautioned the government against excessive dependence on gold to maintain foreign-exchange stability, calling for greater economic diversification through export promotion, increased domestic production and stronger Ghanaian ownership of productive assets.
“The IEA thinks Government has done well to achieve reasonable macroeconomic stability. The question is whether we have the courage to consolidate those gains into lasting economic transformation,” Prof. Darku said.
He also called for economic growth that generates jobs, stronger enforcement by the Fiscal Council and lower lending rates for businesses as monetary policy conditions ease.
“The debate should move beyond accounting entries to how Ghana uses its gold wealth and stability to build a diversified, productive economy,” Prof. Darku added.
Source: capitalnewsonline.com
