BoG’s GH¢9bn Gold Trade Loss Raises Policy Concern
Fresh concerns are emerging over the long-term sustainability of Ghana’s domestic gold purchasing strategy, following significant losses recorded by the Bank of Ghana under its flagship gold programmes.
The central bank’s 2025 audited financial statements indicate that its Gold for Reserves initiative posted an estimated loss of about GH¢8.8 billion, while the Gold for Oil programme recorded an additional GH¢203 million loss. The figures have sparked renewed debate among analysts and policymakers about the structure and execution of the policy.
Policy analyst Alfred Appiah is among those calling for a comprehensive reassessment of the framework, warning that the current model risks weakening, rather than strengthening, the Bank’s financial position if left unchanged.
According to him, the core issue lies in the growing disconnect between the cost of acquiring gold locally and the value realised when that gold is monetised in international markets. While the programme has been widely credited with boosting Ghana’s foreign exchange reserves and easing pressure on the cedi, Appiah argues that too much emphasis has been placed on forex inflows, with insufficient scrutiny of the underlying costs.
“It’s not just about generating foreign exchange,” he noted. “The cost at which that forex is obtained, and its impact on the Bank’s balance sheet, must be part of the conversation.”
The scale of the programme has heightened these concerns. With an estimated GH¢4.5 billion reportedly channelled into gold trading operations through the Ghana Gold Board (GoldBod), analysts warn that sustained losses could erode the capital base supporting the initiative.
A central challenge remains the pricing model. Authorities must strike a delicate balance between offering competitive prices to small-scale miners, to discourage smuggling, and maintaining sufficient margins to cover operational and trading costs. Pricing gold too low risks pushing supply into informal channels, while paying too close to international market rates erodes profitability.
Timing has also emerged as a critical vulnerability. Gold prices are inherently volatile, and delays between procurement and sale can quickly turn expected gains into losses. Without robust trading strategies and effective risk management systems, the programme remains exposed to adverse price movements.
Appiah further pointed to persistent smuggling as a structural weakness undermining the initiative. Even with competitive pricing, weak enforcement allows significant volumes of gold to bypass official channels, reducing the effectiveness of the policy and limiting its intended benefits.
He cautioned that without targeted reforms, the programme could become financially unsustainable, adding pressure to a central bank already managing the costs of broader macroeconomic stabilisation efforts.
Rather than scrapping the initiative, however, he advocates a more disciplined and transparent approach. This, he said, should include stronger cost controls, improved enforcement mechanisms, better timing strategies, and clearer alignment between gold trading operations and reserve management objectives.
“The challenge is to build a system that strengthens reserves without eroding capital,” he stressed, warning against prematurely declaring success while underlying inefficiencies persist.
The debate highlights a broader policy dilemma: how to leverage Ghana’s gold resources to support macroeconomic stability while ensuring that the financial mechanisms underpinning that strategy remain sustainable over the long term.
