Ghana’s Domestic Gold Purchase Programme (DGPP) design is inherently flawed and will lead to unavoidable financial losses, according to the Centre for Policy Scrutiny (CPS). The policy think tank demands a fundamental review and overhaul of the programme’s structure.
The CPS argues that the DGPP’s current design is “too generous,” imposing costs that could significantly reduce Ghana’s benefits from its gold purchasing activities. This assessment follows reports of US$1.7 billion, or GHS 22 billion, in losses under the programme. The think tank emphasizes that while investigating these reported losses is crucial, addressing the underlying structural issues of the DGPP is equally important.
This development occurs amidst increasing public and political scrutiny over Ghana’s gold purchasing arrangements. The DGPP is a key component of Ghana’s strategy to boost its foreign exchange reserves and stabilize the cedi. However, concerns about its financial viability and impact on public finances have grown. The Bank of Ghana (BoG) plays a central role in the programme, making its financial exposure a significant point of contention. Previous reports have highlighted the potential for DGPP losses to necessitate taxpayer-funded recapitalization of the BoG.
The Centre for Policy Scrutiny has explicitly called for a redesign of the DGPP to minimize costs and maximize its benefits for the nation. It warns that the marginal benefits of the existing arrangement will not remain positive indefinitely. This means the programme’s financial and economic returns could worsen if its current structure persists. The CPS also supports parliamentary calls for an Ad Hoc Committee to investigate the reported US$1.7 billion losses, advocating for a bipartisan and transparent inquiry.
Such an investigation should scrutinize the roles of the Bank of Ghana and GoldBOD, particularly regarding their financial exposures and the accounting treatment of transactions. The CPS believes the review must assess whether the resources committed to the DGPP generate value commensurate with the costs. This is especially critical given the programme’s potential implications for Ghana’s foreign exchange reserves and overall public finances. The think tank stresses that Ghana’s gold and foreign exchange resources must be managed to maximize public value, strengthen accountability, and limit unnecessary financial exposure.
The implications of these findings are substantial for Ghana’s economic stability and fiscal health. Decision-makers must now consider the CPS’s recommendations seriously to prevent further financial drain. The government and the Bank of Ghana will need to respond to these calls for reform, potentially leading to significant changes in how Ghana manages its gold resources. International financial institutions, such as the IMF, have also previously urged tighter controls over such programmes, underscoring the urgency of the situation. The outcome of any parliamentary inquiry and subsequent policy adjustments will be closely watched by investors and the public alike.