Gold Trading Losses Offset by Economic Gains — IEA Economist
A Senior Economist at the Institute of Economic Affairs (IEA), Dr. John Kwakye, has argued that losses recorded by the Bank of Ghana (BoG) in gold trading should be viewed within the broader context of the economic benefits derived from the policy, particularly currency and macroeconomic stability.
Dr. Kwakye explained that losses occur along the gold trading value chain because the Gold Board purchases gold from local miners at discounted prices and later sells it to the Bank of Ghana at an agreed rate.
“When it comes to trading the pricing of the gold, the Gold Board will buy the gold from the miners not at the world price. They buy it at some kind of discount and then sell it to the Bank of Ghana at an agreed price. Somewhere along that value chain, Bank of Ghana is making losses,” he said.
However, he cautioned against focusing solely on the losses without considering the broader national gains from the programme.
“We shouldn’t forget that we are also making gains for the country as a whole, in terms of being able to accumulate this large amount of reserves. That is what has helped to stabilise our currency,” Dr. Kwakye noted.
According to him, the accumulation of gold-backed reserves has contributed significantly to overall macroeconomic stability, including inflation control.
“The benefits of a stable currency are felt in general macroeconomic stability. That stability has helped to anchor inflation and bring it down to about 5.4 percent,” he said.
Dr. Kwakye referenced an International Monetary Fund (IMF) report which indicated that the Bank of Ghana incurred losses of about 214 million dollars from gold trading in 2025, while accumulating reserves worth nearly 10 billion dollars from the same operations.
“When you compute 214 million as a percentage of 10 billion, you get about 2.14 percent. In relative terms, you made a loss of 214 million, but you gained 10 billion,” he explained.
While acknowledging that the losses are not insignificant, Dr. Kwakye said a new strategy is being adopted to reduce future costs.
“I am not saying the loss is not significant. Going forward, the strategy is that Bank of Ghana is going to separate itself from the Gold Board,” he stressed.
Under the proposed arrangement, the Gold Board would operate independently with initial government funding, handle gold purchases and refining, and then sell refined gold directly to the central bank.
“That way, Bank of Ghana can avoid the losses that occur along the value chain,” Dr. Kwakye said, adding that the approach would help sustain reserves accumulation while improving efficiency.
