GoldBod operations imposing losses on BoG balance sheet – Prof Bokpin

Economist Professor Godfred Bokpin has raised concerns over the financial implications of the Ghana Gold Board's operations on the Bank of Ghana's balance sheet. While GoldBod has contributed to bringing more foreign exchange into the formal system by purchasing gold from artisanal and small-scale miners, the economist argues that the programme has been scaled up without adequate consideration for the full cost across the gold value chain.

This has led to significant losses that are not immediately reflected in Ghana's public debt figures due to the country's accounting approach. Prof Bokpin emphasized that these losses are accumulating on the Bank of Ghana's books and could potentially require a government recapitalization. He expressed particular concern over the Bank of Ghana's role as the intermediary, which exposes its balance sheet to technical, economic, and valuation losses.

The International Monetary Fund had previously estimated about US$214 million in losses associated with GoldBod's domestic gold purchasing operations, but the institution and the Bank of Ghana initially dismissed this figure. Despite these criticisms, Prof Bokpin acknowledged that GoldBod's intervention had brought measurable benefits, such as narrowing the gap between Ghana's reported gold exports and imports.

However, he questioned whether the benefits justified the higher cost and advocated for a more comprehensive value-chain analysis before the programme's operationalization.