The Institute of Economic Affairs (IEA) has attributed 90% of the GH¢1.7 billion loss from the Domestic Gold Purchase Programme (BGPP) to exchange-rate valuation differences
The IEA Director of Research, Professor Alexander Bilson Darku, said the figure must first be properly disaggregated before conclusions are drawn about the financial performance of the Ghana Gold Board (GoldBod) or the cost of the gold-purchasing programme to the state.
He said the reported GH¢1.7 billion comprised service fees, assaying fees and foreign-exchange valuation differences arising from gold purchases and exports undertaken by GoldBod on behalf of the BoG.
Prof. Darku particularly rejected the description of the service and assaying fees as losses, explaining that they were payments made by the BoG to GoldBod for services rendered and, therefore, constituted revenue to GoldBod.
“I don’t understand why somebody would call revenue as a loss,” he said.
He made the comments at the IEA’s assessment of the 2026 mid-year budget review, held under the theme, “From Stabilisation to Transformation: An Assessment of Ghana’s 2026 Mid-Year Budget Review.”
90% tied to exchange-rate valuation
Prof. Darku said approximately 90 per cent of the reported GH¢1.7 billion figure was primarily an exchange-rate valuation issue.
He explained that GoldBod purchased gold on behalf of the BoG, after which the proceeds from gold exports were converted from US dollars into Ghana cedis using the Central Bank’s applicable reference exchange rate.
Changes in the exchange rate between the point at which the gold was purchased and the point at which the proceeds were valued could consequently create differences in the cedi value of the transactions.
Those differences could appear in the BoG’s books as losses even though no equivalent amount of physical cash or national wealth had necessarily been lost.
“It is merely a book accounting issue, and not a significant loss to the nation,” Prof. Darku said.
The distinction is important because an exchange-rate valuation loss is different from an operating loss in which an institution spends more than it earns or suffers an actual destruction of assets.
The IEA therefore cautioned against interpreting the GH¢1.7 billion figure as meaning that GoldBod or Ghana physically lost GH¢1.7 billion.
BoG loss, GoldBod revenue
The Institute also urged a broader assessment of the transactions between the BoG and GoldBod, both of which are public institutions.
Prof. Darku explained that a cost or loss recorded by one public institution could simultaneously constitute revenue or a gain for another.
“To the Government, its monetary authority, which is the Central Bank, has made that loss. To the Government, its Gold Board has made that gain,” he said.
From that perspective, assessing the transaction solely through the accounts of the BoG could create a misleading impression of the overall financial position of government.
At the consolidated government level, some of the amounts could effectively wash out because the loss recognised by the Central Bank corresponds to revenue recognised by GoldBod.
The IEA is consequently calling for greater care in presenting the figures, particularly because accounting adjustments can easily be interpreted by the public as outright losses to taxpayers.
Service and assaying fees are revenue
Prof. Darku also singled out service and assaying fees as another reason the GH¢1.7 billion should not be presented as a straightforward loss.
GoldBod receives payments from the BoG for services associated with the gold-purchasing programme. Those payments, he said, constitute revenue to GoldBod.
Describing them as losses without considering the receiving institution, he argued, risks confusing a transfer between public institutions with a net loss to the public sector.
The IEA’s argument, however, is not that GoldBod’s financial operations should escape scrutiny.
Rather, it wants the institution’s financial results interpreted within the correct accounting and institutional framework.
New financing model requires scrutiny
Despite challenging the headline characterisation of the GH¢1.7 billion figure, Prof. Darku said GoldBod’s financial operations require careful monitoring.
He drew particular attention to GoldBod’s transition from relying on financing from the BoG to sourcing funds from the private sector for its gold-purchasing activities.
He said the new financing structure could deepen Ghana’s capital markets if properly managed, but stressed that it would also require transparency, prudent financial management and strong oversight.
As GoldBod expands its role in the domestic gold market, the IEA believes its financing arrangements must be sufficiently transparent to enable investors, policymakers and the public to understand the risks and returns associated with its operations.
GoldBod credited with supporting cedi stability
Prof. Darku also acknowledged the wider economic benefits associated with GoldBod’s activities, particularly increased gold exports, foreign-exchange inflows and reserve accumulation.
He said those developments had supported the appreciation and stability of the cedi.
A stronger and more stable cedi, he noted, can reduce the local-currency cost of imports, ease inflationary pressures and contribute to lower interest rates.
It can also improve Ghana’s debt position because foreign-currency-denominated debt becomes less burdensome in cedi terms when the domestic currency is stronger.
The IEA therefore believes GoldBod’s operations should be assessed not only through individual accounting entries but also through their broader macroeconomic impact.
IEA warns against overreliance on gold
However, Prof. Darku cautioned the Government against relying excessively on gold as the principal source of foreign-exchange stability and reserve accumulation.
He urged policymakers to use the current period of improved macroeconomic conditions to broaden Ghana’s export base and reduce dependence on imports.
That, he said, would require stronger export promotion, increased local production, effective foreign-exchange market regulation and greater Ghanaian ownership of productive assets.
An economy heavily dependent on a single commodity remains vulnerable to international price movements and other external shocks.
Gold can provide a valuable source of foreign exchange, he said, but cannot substitute for broad-based productive growth.
From stabilisation to transformation
The IEA also credited the Government with making progress on macroeconomic stabilisation, noting that most macroeconomic indicators had moved in the right direction within a relatively short period.
“The IEA thinks that the Government has done well to achieve some reasonable macroeconomic stability, and most of the macro-indicators have moved in the right direction within a relatively short period of time,” Prof. Darku said.
But he warned that stabilisation must now translate into economic transformation.
“The question is whether we have the courage to consolidate those gains into lasting economic transformation that includes the lives of every Ghanaian,” he said.
The Institute wants the Government to focus on growth that creates jobs and expands productive capacity rather than relying solely on improvements in headline macroeconomic indicators.
GoldBod urged to become strategic asset manager
Prof. Darku called for GoldBod to evolve from being primarily a gold trader into a strategic asset manager capable of helping Ghana derive greater long-term value from its natural resources.
He said the transformation should be accompanied by stronger governance and accountability mechanisms.
The objective, he suggested, should be to ensure that Ghana’s gold wealth contributes not only to short-term foreign-exchange availability but also to long-term capital formation, investment and economic development.
Lower lending rates must reach businesses
The IEA also called for measures to ensure that reductions in the monetary policy rate translate into lower lending rates for businesses and private-sector operators.
Prof. Darku said monetary easing would have limited impact on economic transformation if businesses continued to face expensive credit.
He further urged stronger enforcement powers for the Fiscal Council to improve fiscal discipline and ensure that government finances remain sustainable.
Focus on jobs and productive capacity
The IEA is consequently urging a shift from celebrating macroeconomic stabilisation to building a productive economy capable of sustaining growth.
That includes greater investment in agriculture, employment-led growth, local processing of natural resources and reforms to the natural-resource regime.
At the centre of its assessment is the insistence that the GH¢1.7 billion figure should not be presented as GH¢1.7 billion of actual losses incurred by GoldBod.
About 90 per cent, according to Prof. Darku, is primarily an exchange-rate valuation difference recorded in the BoG’s accounts, while the remaining components include service and assaying fees that represent revenue to GoldBod.
The Institute nevertheless maintains that GoldBod must face rigorous financial oversight, particularly as it adopts new financing arrangements and assumes a larger role in Ghana’s gold and foreign-exchange markets.
Ultimately, the IEA says the debate should move beyond whether GH¢1.7 billion appears as a loss in one institution’s accounts and focus instead on how Ghana can use its gold resources and current macroeconomic stability to build a diversified, productive and resilient economy.
The broader objective, it says, must be to convert increased gold exports, stronger reserves and exchange-rate stability into sustainable growth, jobs, productive investment and improved living standards.
