The Institute of Economic Affairs (IEA) has clarified that a reported GHS 1.7 billion figure under the Bank of Ghana's Domestic Gold Purchase Programme is largely an accounting issue. This amount does not represent a true financial loss for the Ghana Gold Board (GoldBod) or a depletion of national wealth.
The IEA explained that the GHS 1.7 billion figure mainly reflects foreign-exchange valuation differences and payments for services. Professor Alexander Bilson Darku, the IEA's Director of Research, stated that about 90 percent of this amount is an exchange-rate valuation issue. This occurs when GoldBod purchases gold for the Bank of Ghana, and the proceeds are converted from US dollars to cedis using the central bank's reference exchange rate. Differences in exchange rates at various points can create a 'loss' in accounting records.
This clarification fits into Ghana's broader economic narrative, which seeks to stabilize key macroeconomic indicators while pursuing sustainable growth. The Bank of Ghana's Domestic Gold Purchase Programme aims to boost foreign exchange reserves and support the cedi. Understanding the true nature of reported financial figures is crucial for public confidence and informed policy-making, especially as Ghana navigates its economic recovery and transformation agenda.
Professor Darku emphasized that service and assaying fees paid by the Bank of Ghana to GoldBod for services rendered constitute revenue for GoldBod. He questioned why revenue would be characterized as a loss. He further argued that a cost recorded by one public institution, like the Bank of Ghana, could simultaneously represent revenue for another, such as GoldBod, within the government's overall financial framework. This perspective suggests that these figures often offset each other at a national level.
Moving forward, decision-makers and markets will closely monitor GoldBod's financial operations and its transition to new funding models. The IEA called for continued scrutiny of GoldBod's finances, especially as it moves from Bank of Ghana financing to private-sector funding. This new model could deepen Ghana's capital markets if managed with transparency and strong oversight. The IEA also urged the government to transform GoldBod from a gold trader into a strategic asset manager. This shift would align with broader calls for economic transformation, including increased local processing of natural resources and stronger investment in agriculture.
Professor Darku acknowledged GoldBod's positive contributions, including increased gold exports, foreign-exchange inflows, and reserve accumulation. These factors have supported the cedi's appreciation and stability. However, he cautioned against over-reliance on gold for exchange-rate stability. The IEA advocates for broader export promotion, import substitution, tighter foreign-exchange market regulation, and increased local ownership of the economy. These measures are essential for consolidating recent macroeconomic gains into lasting economic transformation that benefits all Ghanaians. The IEA also called for stronger enforcement powers for the Fiscal Council and mechanisms to ensure that reductions in the monetary policy rate translate into lower lending rates for businesses.