Minority Leader Alexander Afenyo-Markin has rejected GoldBod’s assertion that its role as an agent for the Bank of Ghana (BoG) shields it from responsibility for losses in the country’s gold trading operations. He stated that GoldBod cannot use accounting classifications or its agency relationship to avoid scrutiny over transaction execution.
Mr. Afenyo-Markin emphasized that while GoldBod might purchase gold on behalf of the Bank of Ghana, this arrangement does not remove its operational responsibility. He argued that any institution entrusted with billions of cedis in public resources must be accountable for the quality of its execution and decisions. This includes explaining how GHS 22 billion in reported losses accumulated.
This demand for accountability fits into a broader national conversation about public finance management and transparency. Ghana’s economic stability relies on prudent management of state resources, especially in key sectors like gold. Previous discussions have highlighted the need for robust oversight of state-owned enterprises and their dealings with central financial institutions.
“Gold Board cannot hide behind accounting technicalities,” Mr. Afenyo-Markin declared at a press conference in Parliament on Tuesday, August 18. He further stated, “Agency does not extinguish operational responsibility,” underscoring his position on GoldBod’s obligations despite its relationship with the central bank.
The implications of this challenge are significant for public finance and corporate governance. GoldBod now faces pressure to provide detailed explanations, which could lead to investigations into its operational practices and financial arrangements. Decision-makers and the public will closely watch how GoldBod responds and what measures are taken to prevent future losses.
Mr. Afenyo-Markin’s comments form part of the Minority’s broader demand for greater transparency. He seeks detailed explanations about transactions financed by the Bank of Ghana. GoldBod plays a central role in Ghana’s gold trading system, involved in buying, weighing, grading, assaying, valuation, and export of gold. This extensive involvement necessitates clear accountability.
The Minority Leader specifically demanded information on prices paid for gold and their determination. He also wants GoldBod to disclose any premiums paid to secure gold supplies. Furthermore, he requested details on how international off-takers were selected and the discounts at which gold was subsequently sold. These details are crucial for understanding the financial efficiency of the operations.
Mr. Afenyo-Markin also questioned how much GoldBod earned in service and asset charges from transactions financed by the Bank of Ghana. He insisted the institution should explain the commercial and transactional risks it assumed. He also asked which risks were transferred to the central bank. Additionally, he sought information on internal controls in place to protect the Bank of Ghana from losses. He also inquired about corrective measures taken as losses accumulated.
The Minority Leader raised concerns about a potential “moral hazard.” This occurs if GoldBod earns transaction-based income while the Bank of Ghana bears the underlying trading losses. Such a structure could incentivize increased transaction volumes, even if they do not generate value for the financier. “If an institution earns transaction-based income for purchasing, assaying, and aggregating gold, while the financier bears the underlying trading losses, then increasing transaction volumes may increase the agent’s revenue, even where the overall programme destroys value for the principal,” he explained.
Mr. Afenyo-Markin argued that the reported GHS 22 billion losses should trigger an investigation. This investigation should determine if the incentive structure contributed to excessive transaction volumes. It should also examine weak pricing discipline or insufficient attention to trading costs. He rejected attempts to address concerns by merely pointing to GoldBod’s reported surplus. This ongoing debate highlights the critical need for robust financial oversight in Ghana’s commodity trading sector.