- Ghana bought stability at a cost: Inside the US$1.70bn domestic gold purchase loss
Ghana’s aggressive use of domestically purchased gold to rebuild foreign-exchange reserves and support the cedi delivered one of the most consequential macroeconomic interventions of the post-debt-crisis period, but it also created losses that have opened a difficult policy debate over how much financial cost the country should absorb in pursuit of currency stability and reserve accumulation.
An economic analysis by banking and corporate governance consultant Dr Richmond Akwasi Atuahene estimates that losses associated with the Bank of Ghana’s Domestic Gold Purchase Programme reached about US$400 million in 2024 before surging to more than US$1.70 billion in 2025 as the programme expanded sharply.
The paper argues, however, that the losses should not be interpreted simply as evidence of waste, corruption or failed gold trading. Rather, they reflect a combination of exchange-rate valuation differences, service and assay fees, commercial discounts, transaction costs and the structural design of a programme that prioritised reserve accumulation and foreign-exchange generation over pure trading profitability.
That distinction is central to understanding the controversy. Ghana’s gold-purchase programme was not created principally as a speculative trading desk expected to maximise margins from buying and selling bullion. It was designed as a macroeconomic tool at a time when the country had lost access to international capital markets, reserve buffers had weakened and the cedi was under severe pressure.
The result was a policy that increasingly placed gold at the centre of the country’s foreign-exchange strategy.
According to the paper, drawing on IMF reporting, gold-related foreign-exchange inflows increased from US$1.70 billion in 2023 to US$4.00 billion in 2024, before rising sharply to US$12.70 billion in 2025. Of the latter figure, about US$1.10 billion represented net gains from bullion sales.
The programme therefore became a major source of foreign-exchange liquidity at precisely the time Ghana was trying to restore macroeconomic stability.
But the same expansion that strengthened reserves also magnified the financial costs attached to the programme.
The Domestic Gold Purchase Programme was introduced in 2021 and later transitioned toward the Ghana Gold Board framework.
Its purpose was broad: purchase locally produced gold in cedis, strengthen foreign reserves, support currency stability and formalise parts of the artisanal and small-scale mining sector.
The paper argues that this strategy became particularly important during Ghana’s debt crisis, when access to external financing narrowed and traditional reserve-building channels weakened.
At the macroeconomic level, the gains were substantial. The analysis states that the DGPP became a predominant driver of the Bank of Ghana’s foreign-exchange cash flows and contributed materially to the increase in gross international reserves to US$11.90 billion, equivalent to roughly four months of imports, by the end of 2025.
The programme also facilitated the export of large volumes of artisanal gold. The paper cites IMF estimates indicating that artisanal gold exports reached US$10.80 billion in 2025, equivalent to about 9.50% of GDP.
That made gold not merely a mining-sector issue but a central component of Ghana’s external-sector strategy.
In 2024, programme-related losses were estimated at almost US$400 million, equivalent to about 0.50% of GDP. In 2025, the figure exceeded US$1.70 billion, or roughly 1.50% of GDP.
The paper’s own comparative table presents total gold purchases of US$4.00 billion in 2024, less transactional losses of US$400 million, leaving net foreign-exchange earnings of US$3.60 billion.
For 2025, it presents gross gold earnings of US$10.80 billion, less transactional losses of US$1.70 billion, leaving net foreign-exchange earnings of US$9.10 billion.
The numbers illustrate the core policy dilemma: Ghana generated vastly more foreign exchange from gold than the programme lost, but those losses were still large enough to materially weaken the central bank’s financial position.
The paper identifies several drivers. The most important was the rapid scale-up of purchases, particularly from the artisanal and small-scale mining sector under the Gold for Reserves framework.
As volumes increased, so did the exposure to pricing differentials, commercial charges and foreign-exchange mismatches.
The analysis also points to a fundamental accounting problem: gold was often purchased domestically using forex bureau-linked rates, while the Bank of Ghana accounted for the resulting foreign exchange at a different reference rate.
The paper states that these exchange-rate effects were among the most important contributors to the reported losses.
It also identifies service and assay fees, off-taker discounts and other trading costs as additional sources of losses.
In practical terms, the central bank could purchase gold at one effective local-currency cost, incur refining, assaying and intermediary charges, and later record the proceeds at an exchange rate that did not fully reflect the acquisition cost.
The result could be an accounting loss even where the transaction had broader macroeconomic benefits.
This is why the paper insists that the US$1.70 billion figure should not automatically be equated with cash disappearing from the system.
It argues that part of the loss reflects valuation and accounting effects rather than pure economic waste.
That point matters because public debate has often treated the headline loss figure as if it were equivalent to a failed commercial transaction.
The paper’s position is more nuanced. It accepts that the losses weakened the Bank of Ghana’s balance sheet but argues that they must be assessed against the foreign-exchange and reserve benefits generated by the programme.
The deeper issue is whether a central bank should absorb losses in pursuit of wider macroeconomic objectives.
Central banks routinely undertake operations that are not designed to maximise profit. They intervene in foreign-exchange markets, sterilise liquidity, manage reserves and support financial stability.
The question is whether the scale and structure of Ghana’s gold operations exposed the central bank to costs that could have been better controlled.
The paper suggests the answer is yes.
It notes that the Bank of Ghana’s negative equity stood at 6.70% of GDP at the end of 2025, meaning that further quasi-fiscal losses matter even where they support macroeconomic stability.
The analysis also states that the published loss figures do not include the cost of sterilising the liquidity created through reserve accumulation.
That implies the full economic cost of the programme may extend beyond the headline trading losses.
This does not invalidate the strategy, but it raises the standard by which it should be judged.
The relevant comparison is not simply “loss versus no loss”. It is whether Ghana could have achieved similar reserve and currency-stability outcomes at a lower financial cost. That is where the paper’s recommendations become most relevant.
The first major reform proposed is the introduction of systematic hedging. The paper argues that GoldBod should use financial derivatives, options and offsetting positions to protect against adverse price movements between the purchase of gold and its eventual sale.
Hedging would not eliminate all losses, particularly those caused by exchange-rate accounting differences, but it could reduce the programme’s exposure to international gold-price volatility.
This is particularly important in a market where gold prices can move sharply within short periods.
The paper also recommends that GoldBod move away from rigid spot-purchasing mechanisms and use structured pricing windows linked more closely to London Bullion Market Association benchmarks.
Such a system could improve cost predictability and reduce the risk of overpaying relative to international reference prices.
The challenge is that local prices must remain competitive enough to prevent smuggling. If official buyers pay too little, gold will move into informal channels or across borders.
If they pay too much, the state risks creating persistent losses. The pricing problem is therefore structural: GoldBod must offer enough to attract supply without subsidising the market to the point that reserve accumulation becomes financially unsustainable.
A second major recommendation is value addition. The paper argues that Ghana should refine more of its domestically purchased doré locally rather than exporting raw or semi-processed gold.
It specifically suggests partnerships with domestic refineries to process doré into high-purity bullion, thereby retaining refining fees in Ghana and potentially improving export margins.
The economic logic is straightforward. If Ghana pays for domestic production, absorbs transaction costs and then exports the gold for further processing abroad, part of the value chain is lost.
Local refining could reduce some foreign processing costs and allow the country to capture more of the margin between mine output and internationally tradable bullion.
But refining alone would not solve the central challenge. The scale, certification, market acceptance and governance of domestic refining infrastructure would all matter.
To generate real savings, locally refined bullion would need to meet international standards and be accepted by global counterparties at competitive prices.
The paper also connects financial efficiency with responsible sourcing. It argues that weak traceability creates both environmental and economic risks.
Ghana’s artisanal and small-scale gold sector has long been associated with illegal mining, smuggling, environmental degradation and weak supply-chain visibility.
The paper recommends blockchain-based track-and-trace systems, regional buying centres, standardised assaying and stronger KYC and AML controls.
These proposals are not merely compliance measures. Better traceability could reduce leakages, lower the number of intermediaries and improve the state’s ability to verify the origin, purity and legality of the gold it purchases.
The paper also calls for stronger alignment with internationally recognised responsible-sourcing standards, including OECD and LBMA frameworks.
That matters because Ghana’s ability to sell gold into premium international markets increasingly depends on proving that its supply chains are free from serious environmental, labour and financial-crime risks.
Without credible traceability, the country could face higher compliance costs or discounted pricing.
The analysis also raises a difficult contradiction at the heart of Ghana’s gold strategy.
The country has benefited from a sharp increase in artisanal gold exports, but some of that expansion has occurred against the backdrop of severe environmental degradation linked to illegal mining.
The paper highlights pollution of major rivers, destruction of forest reserves and degradation of cocoa farmland as evidence that reserve-building policy cannot be separated from environmental governance.
If Ghana accumulates more reserves by purchasing more gold but does so from a supply chain that destroys water bodies, farmland and local livelihoods, the apparent financial benefit may conceal significant long-term economic costs.
A sustainable gold-purchase strategy therefore requires more than better trading.
It requires credible enforcement against illegal mining, strong environmental standards and reliable origin verification.
The paper’s overall recommendation is that GoldBod evolve from a basic purchasing intermediary into a commercially sophisticated institution.
That means better pricing, lower intermediation costs, stronger assaying, more direct engagement with miners, use of commercial bank financing and reduced reliance on the central bank’s balance sheet.
The transition is important because the scale of the programme has outgrown the institutional arrangements under which it began.
A programme handling billions of dollars in gold purchases requires risk-management systems comparable to those used by major commodity traders and financial institutions.
That includes hedging desks, treasury functions, market-risk controls, counterparty-risk frameworks, audit systems and transparent reporting.
Without those capabilities, the state risks repeating the same losses at larger scale.
Was the programme worth it? The paper answers that question cautiously but leans toward yes.
It argues that the US$1.70 billion loss must be viewed alongside the US$10.80 billion in gross foreign-exchange earnings and the wider reserve and currency-stability benefits.
The counterfactual matters. Had Ghana instead attempted to rebuild reserves through international borrowing, the country would have faced interest costs, refinancing risk and additional foreign-currency debt.
The gold strategy allowed Ghana to generate foreign exchange from a domestic resource rather than rely exclusively on external capital markets.
That is a meaningful benefit. But the existence of a benefit does not make every cost acceptable.
The better policy question is whether Ghana can preserve the reserve gains while significantly reducing the transactional and balance-sheet losses. That is the challenge facing both GoldBod and the Bank of Ghana.
The domestic gold programme has already demonstrated that Ghana can convert mineral production into reserve strength at scale.
The next test is whether it can do so more efficiently.
That will require a shift from emergency macroeconomic intervention toward disciplined commodity-market management.
Hedging, transparent pricing, local refining, direct sourcing, stronger assaying, reduced intermediation and credible traceability are no longer optional reforms. They are becoming central to the sustainability of the programme.
The US$1.70 billion loss should therefore be understood neither as proof that the entire strategy failed nor as a figure that can be dismissed simply because reserves increased.
It is instead a warning. Ghana has found a powerful mechanism for mobilising foreign exchange from domestic gold.
The challenge now is to ensure that the mechanism does not weaken the very institutions it was designed to strengthen.
The country’s gold strategy has already helped rebuild reserves and support currency stability.
The next phase must prove that Ghana can capture those benefits without repeatedly absorbing losses on a scale large enough to damage the central bank’s balance sheet.
That is the real policy test and one that will determine whether Ghana’s gold-for-reserves strategy becomes a durable pillar of economic management or an expensive emergency instrument that outlived the crisis that created it.
