A debate is emerging over the economic cost and benefits of the Ghana Gold Board (GoldBod), following claims that the Bank of Ghana and GoldBod recorded about US$1.7 billion in policy-related accounting costs associated with gold trading.
Economist and political commentator Razak Kojo Opoku argues that the figure should not be interpreted as a direct cash loss to the state, but rather as a quasi-fiscal cost arising from exchange-rate differences, transaction costs, discounts and other expenses linked to the gold trading arrangement.
According to Dr Opoku, GoldBod has nevertheless made progress towards its core objectives of increasing Ghana’s foreign exchange reserves, supporting cedi stability and reducing gold smuggling.
He argues that the estimated US$10 billion boost to the country’s foreign exchange reserves and the narrowing of the gold smuggling gap should be considered alongside the reported US$1.7 billion cost of the intervention.
He has therefore questioned whether Ghana should focus primarily on the reported GoldBod losses or the much larger estimated US$11.4 billion the country lost to gold smuggling between 2019 and 2024.
Dr Opoku is also calling for a broader assessment of GoldBod’s impact on illegal mining, while comparing the current arrangement with previous interventions such as the Gold-for-Oil and Gold-for-Reserves programmes to determine which policy offers Ghana the greatest economic benefit.
Below is his assessment:
a). Specific Objectives of GoldBod:
1. To increase national foreign exchange reserves.
2. To stabilize the cedi.
3. To curb illegal gold smuggling.
b). Purported Losses at GoldBod:
$1.7 billion losses, reported by IMF.
c). Reasons for the $1.7 billion losses cited by IMF:
Losses caused by policy-related accounting cost or “quasi-fiscal” cost or trading shortfalls or transaction cost, and NOT as a result of direct cash loss or financial loss to the State.
Per page 10 of the report, “Losses accrued on gold trades are a combination of service and assay fees paid to GoldBod, discounts on gold sold to off-takers(exporters) and most importantly, exchange rate losses from the spread between the forex bureau rate paid to purchase gold and the cedi reference rate used for BoG(Bank of Ghana) accounting.”
Therefore, it is UNFAIR to soley blamed GoldBod for the $1.7 billion losses when Bank of Ghana is clearly in the picture.
d). Best Examples to Practically Explain the meaning of Policy-related Accounting Cost (“Quasi-Fiscal Cost”)
Government decision to spend about GH¢ 207 million on Fertilizer Subsidy, an amount which represents 50% price cut to benefit farmers.
Government decision to spend about GH¢ 25 billion on banking and financial sector clean-up exercise to protect the funds of depositors.
Government decision to offer a GH¢ 2 per litre cut (reduction) at the pumps to cushion consumers of petroleum products.
e). Is GoldBod Achieving its Specific Objective 1 (To Increase National Foreign Exchange Reserves):
Yes, but there is still room for improvements.
GoldBod has significantly contribute to the increase of the national foreign exchange reserves of Ghana, with estimated figure of about $10 billion.
Is it prudent strategy to lose $ 1.7 billion to attract a revenue of $10 billion? Yes or No answer.
Is there a better alternative gold trading policy for Ghana to raise $10 billion for the national foreign exchange reserves without the Country losing $1.7 billion as a result of policy-related accounting cost(quasi-fiscal cost)?
f). Is GoldBod Achieving its Specific Objective 2(To stabilize the Cedi):
Yes, so far there is relative stability of the cedi against the US Dollar and other major trading currencies since the introduction of the GoldBod initiatives.
However, there is still room for improvements.
We want to experience Ghana whereby $1 is equivalent to GH¢ 5, and also with the Cedi performing extremely better against other trading currencies.
g). Is GoldBod Achieving its Specific Objective 3 (To curb illegal gold smuggling):
Yes, but a lot more has to be done by GoldBod to completely eradicate gold smuggling.
According to the IMF, Ghana is estimated to have lost about $11.4 billion to gold smuggling between 2019 and 2024.
The discrepancy between gold exports reported by Ghana and imports recorded by the United Arab Emirates(UAE) exceeded $4 billion, according to the IMF Report.
$1.7 billion loss at Bank of Ghana caused by policy-related accounting cost versus $11.4 billion loss from 2019 to 2024 caused by gold smuggling, which of them should we be worried about the most as a citizens of Ghana?
h). Impact of GoldBod on the Activities of Galamsey
My major concerns are that:
1. what measures have GoldBod put in place to address galamsey activities in the country?, and also ensure that the GoldBod do not purchase gold from companies and individuals engaging in galamsey activities?
Is the operations of GoldBod significantly contributing to rising activities of galamsey in the Country?
How GoldBod has managed to reduce gold smuggling and by what estimate in terms of US Dollars?
i). Gold for Oil Programme and its losses from 2022-March 2025
The purposes of the Gold- for-Oil Programme(G4O) were:
1. To ease pressure on foreign exchange reserves.
2. Stabilize domestic fuel prices.
However, according to Bank of Ghana, the Gold-for-Oil(G4O) programme incurred financial losses of about GHS 2.43 billion, with the termination of the G4O programme in March 2025.
The net loss on gold trading for Gold-for-Reserves(G4R) and Gold-for-Oil(G4O) for 2024 was estimated to be around GHS 5.66 billion(approximately GHS 5.7 billion).
Conclusion
Bank of Ghana in trading partnership with Ghana Gold Board(GoldBod) has incurred a policy-related accounting costs of $1.7 billion according to the IMF, and this cost is not as result of directly losing cash(financial losses). However, this $1.7 billion loss is better compared to losing $11.4 billion between 2019-2024 to gold smuggling.
Both for Gold-for-Oil(G4O) and Gold-for-Reserves(G4R) incurred financial loss of GHS 5.7 billion but the question is that, were the policies of G4O and G4R able to achieved its intended purposes of currency stability, fuel prices stabilization, and prevention or reduction of gold smuggling?
As a Country, should we reverse to Gold-for-Oil(G4O) or Gold-for-Reserves(G4R) or maintain the Ghana Gold Board(GoldBod)?
…signed…
Razak Kojo Opoku(PhD)
