Ghana’s traditional and social media have been awash with discussions and lamentations after the IMF’s latest country report revealed that the Bank of Ghana (BoG) has incurred a whopping $214 million loss as a result of the Domestic Gold Purchase Programme (DGPP).
Many analysts, as well as some Ghanaians, are expressing concern over the loss and worried about the potential impact of such a loss.
But amid the heated debate, natural resource governance expert Dr. Steve Manteaw is bringing some perspectives that are getting missed in the conversation, though very important. Dr. Manteaw says the focus on losses alone tells only half the story and risks misleading the public.
The natural resource governance expert maintains that the real question should not be whether losses occurred, but whether the country gained more than it lost.
In a reaction to the issue, the former Chair of the Public Interest and Accountability Committee (PIAC) explained the circumstances of the loss, the benefits of the entire program, and how the benefits can be sustained.
Why the Losses Were Expected
For many analysts and Ghanaians who are surprised by the loss, Dr. Manteaw says the reported losses should not come as a surprise. In his submission, he emphasized that from the start, the programme was designed in a way that made operational losses almost inevitable.
GoldBod, which bought gold on behalf of the Bank of Ghana, purchased the gold at zero percent discount.
This means it bought gold at full market price and sold it at the same price. Just like a shopkeeper who buys goods at GHS10 and sells at GHS10, any additional costs, such as transport, salaries, utilities, and logistics, automatically become losses.
“I have always known that the BoG was incurring losses. This is because GoldBod, which was procuring the gold on behalf of BoG, was made to buy at no discount. It is like going to buy goods for your shop at a unit price of GHC10 and retailing it at a unit price of GHC10,” he noted.
He further clarified, “The loss you incur will be your transport cost, the salary of your shopkeeper, utility, and other operational costs. This is similar to the costs BoG, for good reasons, decided to absolve, leading to the reported losses.”
Zero Discount Was a Policy Choice, Not a Mistake
The question on the lips of many critics is why BoG would agree to buy gold without a discount. Dr. Manteaw says the answer is to stop smuggling.
He explains that by offering miners full market value, the programme made it more attractive for local gold producers to sell legally to GoldBod rather than smuggle gold out of the country.
The sharp increase in domestic gold purchases, he argues, shows the policy worked as the miners embraced those incentives.
“The unprecedented rise in domestic gold purchases suggests that miners find it attractive to sell their gold at zero percent discount to the GoldBod,” he emphasized.
The Bigger Picture: What Ghana Gained
Dr. Manteaw urges Ghanaians to look beyond the $214 million loss and examine the net benefit. Since the start of the programme, Ghana has earned over $10 billion from gold exports.
That foreign exchange, he says, has played a key role in stabilising the cedi at a time of extreme economic pressure. The impact has gone beyond the central bank and filtered through the entire economy.
He adds that the net effect of the programme, despite the $214 million, is the forex stability, which has helped slow inflation, ease interest rates, and reduce fuel prices. This means some relief at the pumps and potentially lower transport and food costs if savings are passed on.
In his words, the reported loss is less than three percent of the foreign exchange income generated by gold exports.
“This has helped BoG to build unprecedented volumes of gold reserves, the export proceeds of which are used to shore up our local currency. The net benefit of the reported losses from the domestic gold trade is the over US$10 billion earned from gold exports, which is doing magic to the entire Ghanaian economy,” he insisted.
He continued, “The reported loss is less than 3% of the forex income from exports. Forex stability has been sustained since the inception of the GoldBod. This has fed into a general decline in inflation, interest rates, and other macro indicators. Fuel prices are coming down and easing the pressure on the budgets of motorists.”
A Loss with Gains Versus a Loss Without Any Gain
Dr. Manteaw further contrasts the DGPP losses with the Bank of Ghana’s wider financial performance.
In 2024 alone, BoG recorded an operating loss of GH¢9.49 billion, following an even bigger loss of GH¢13.23 billion in 2023. Unlike the gold programme, he notes, these losses came with little visible economy-wide benefit.
For him, if Ghanaians and the IMF are worried about losses, they should ask which one delivered value to the country.
The Bottomline
According to Dr. Manteaw, the DGPP should be seen as a strategic investment rather than a failed programme. The costs were real, but so were the benefits seen in higher gold reserves, stronger export earnings and improved currency stability.
Solely focusing narrowly on the US$214 million loss without acknowledging the broader gains risks turning a national success story into a headline scandal.
