- IEA Challenges Goldbod Loss Narrative As GH¢1.7bn Debate Shifts to Accounting and FX Effects
Ghana’s increasingly contentious debate over losses associated with the domestic gold purchasing programme may be obscuring a more important question: whether the country is actually losing money in an economic sense, or whether accounting treatment and foreign-exchange valuation effects are making the policy appear more costly than it is.
The Institute of Economic Affairs has entered that debate with a direct challenge to the prevailing narrative around a reported GH¢1.7 billion loss linked to Ghana’s gold purchasing operations, arguing that much of the figure reflects accounting treatment rather than an outright destruction of public wealth.
Professor Alexander Bilson Darku, Director of Research at the IEA, said the amount attributed to the Ghana Gold Board included service and assaying fees as well as exchange-rate valuation differences arising from the purchase and export of gold on behalf of the Bank of Ghana.
His argument goes to the heart of a distinction that has become increasingly important in the public debate: the difference between a cash loss, an accounting loss and a policy cost.
“I don’t understand why somebody would call revenue a loss,” Prof Darku said during the IEA’s assessment of the 2026 Mid-Year Budget Review.
His position is that where the Bank of Ghana pays GoldBod for services rendered, that payment may appear as an expense on the central bank’s books but simultaneously appears as revenue to another public institution. Viewed only from the BoG’s balance sheet, the transaction may look like a cost. Viewed from the consolidated public-sector perspective, the economic effect may be different.
That distinction does not mean the cost disappears. It means the question must be framed more carefully.
According to Prof Darku, roughly 90.00% of the amount under discussion is linked to exchange-rate valuation effects. Under the arrangement, GoldBod purchases gold on behalf of the Bank of Ghana, while export proceeds are later converted from US dollars into cedis using the central bank’s applicable reference exchange rate.
If the exchange rate applied when the gold is purchased differs from the rate used when the proceeds are subsequently valued, the accounting treatment can generate a shortfall.
“It is merely a book accounting issue, and not a significant loss to the nation,” Prof Darku said.
That is a significant claim because it challenges the way the controversy has been presented publicly.
An accounting loss is not the same thing as cash physically disappearing from the state. A valuation difference may weaken the reported financial position of one institution without necessarily representing an equivalent reduction in national wealth.
Persistent valuation losses can still weaken the Bank of Ghana’s balance sheet, reduce its financial buffers and complicate monetary operations. If the central bank is effectively carrying policy costs on behalf of government, then the accounting treatment becomes part of a broader question about quasi-fiscal activity and the appropriate boundary between monetary policy and commercial intervention.
That is why the controversy is bigger than whether a particular number should technically be labelled a “loss”.
The real issue is where the economic burden of Ghana’s gold purchasing strategy ultimately sits.
Prof Darku argued that the Bank of Ghana and GoldBod should be viewed together from the perspective of the consolidated public sector.
“To the Government, its monetary authority, which is the Central Bank, has made that loss. To the Government, its Gold Board has made that gain,” he said.
That formulation is useful, but it does not fully resolve the policy question. If the BoG absorbs losses while another public entity records gains, the state may be neutral in a narrow consolidated accounting sense. But the institutional distribution still matters because the central bank’s balance sheet is not interchangeable with that of another state body.
A weaker central bank balance sheet can have implications for credibility, capital adequacy, monetary-policy transmission and the ability to absorb future shocks.
The debate has become even more consequential because Parliament is expected to examine a separately reported US$1.70 billion, or about GH¢22 billion, in losses or policy costs associated with the broader domestic gold purchase programme.
Speaker Alban Bagbin has indicated that parliamentary scrutiny should determine whether that amount represents an actual financial loss or the cost of implementing the policy.
If the figure represents transaction costs, service fees, valuation effects and exchange-rate differences associated with reserve accumulation, then it should be described and assessed differently from fraud, operational waste or a cash loss.
If, however, part of the amount reflects avoidable inefficiency, unfavourable pricing, weak risk management or poor execution, then that component should be identified separately.
Without that disaggregation, the public debate risks collapsing very different financial concepts into a single headline number.
The Bank of Ghana’s role in financing domestic gold purchases is therefore becoming almost as important as the headline loss itself.
If the central bank is bearing exchange-rate, pricing and commercial risks associated with gold acquisition, then the programme may be imposing costs on a monetary authority whose primary responsibilities are price stability, financial stability and reserve management.
Prof Darku acknowledged the possibility of shifting more financing towards the private sector, arguing that properly structured private financing could also support the development of Ghana’s capital markets.
That could reduce the concentration of commercial and exchange-rate risk on the BoG’s balance sheet.
But it would not eliminate the need for transparency. Private financing can simply move risk elsewhere if guarantees, contingent liabilities or opaque structures ultimately leave the state responsible for losses.
The deeper economic case for the gold strategy remains substantial. Formal domestic gold purchases can increase foreign-exchange inflows, build international reserves and support the cedi. A more stable exchange rate can in turn reduce imported inflation, moderate the domestic cost of fuel and other essential imports and improve debt ratios by lowering the cedi value of foreign-currency liabilities.
Prof Darku credited GoldBod’s activities with contributing to foreign-exchange inflows, reserve accumulation and currency stability.
That is precisely why the debate should not be reduced to whether the programme recorded a negative accounting entry.
A policy can produce macroeconomic benefits while still carrying measurable financial costs.
The proper question is whether those costs are proportionate to the benefits, transparently recorded and borne by the institution best placed to manage them.
Ghana remains exposed to commodity-price cycles and continues to depend heavily on imported fuel, machinery, finished products and intermediate goods.
Gold can provide foreign-exchange relief, but it cannot permanently solve a structural balance-of-payments problem rooted in a narrow export base and weak domestic productive capacity.
Prof Darku therefore argued that the gold strategy must be complemented by export promotion, import substitution, stronger foreign-exchange market regulation, increased local ownership and greater domestic processing of natural resources.
“The IEA thinks that the Government has done well to achieve some reasonable macroeconomic stability, and most of the macro-indicators have moved in the right direction within a relatively short period of time,” he said.
But he cautioned that stabilisation is only the beginning.
“The question is whether we have the courage to consolidate those gains into lasting economic transformation that includes the lives of every Ghanaian.”
That is ultimately where the GoldBod debate should land. The issue is not simply whether Ghana lost GH¢1.7 billion, US$1.70 billion or some other headline amount.
It is whether the country has built a gold purchasing and reserve accumulation system in which the costs are accurately classified, the risks are transparently allocated, the benefits are measurable and the central bank is not left carrying burdens that properly belong elsewhere.
If the majority of the reported loss is genuinely an accounting and valuation effect, that should be made clear.
If part of it represents real economic cost, that should also be disclosed. The most damaging outcome would be to confuse the two.
For Ghana, the credibility of the gold strategy will depend less on defending or attacking a single figure than on showing, with precision, what the programme costs, what it earns and who ultimately bears the risk.
