Minority Questions BoG role in GOLDBOD Transactions & Demands Accountability

The Minority in Ghana's Parliament has raised concerns about the Bank of Ghana's involvement in the domestic gold purchasing program, which is a joint effort with GoldBod. The Minority Leader, Osahen Alexander Afenyo-Markin, has expressed skepticism over the allocation of financial risks associated with the transactions. He maintains that GoldBod cannot absolve itself of responsibility simply because the losses are recorded on the central bank's books.

Afenyo-Markin describes the arrangement as one that requires further investigation, especially given GoldBod's involvement in critical stages of the gold trade. He points out that GoldBod not only buys, aggregates, assays, and exports the gold but also earns fees from the transactions. In contrast, the Bank of Ghana provides the financing but absorbs the bulk of the financial downside.

The Minority Leader questions the rationale behind this structure, which he believes could lead to a moral hazard. With the institution executing the transactions earning fees based on those transactions, while another institution bears the principal financial risk, incentives may not align. Afenyo-Markin says Parliament must determine who designed the arrangement, who approved it, who executed it, how risks were monitored, and why existing safeguards failed to prevent the substantial losses.

He also demands information on the pricing and commercial arrangements surrounding the transactions, including the prices at which gold was purchased, how those prices were determined, the premiums paid for supply, the selection of international off-takers, the discounts at which gold was sold, and the risk-management mechanisms deployed. Afenyo-Markin emphasizes that while agency does not absolve responsibility, an entity entrusted with billions of cedis of public resources must remain accountable for its execution.

The Minority Caucus is not opposed to the development of Ghana's gold industry or GoldBod's participation in the sector. However, they are concerned about the protection of public resources and ensuring state institutions operate within transparent and accountable frameworks. They warn that the reported financial losses should not be dismissed as mere accounting explanations.

The Caucus is calling for greater transparency in the operations of the domestic gold purchasing program and demands a full examination of the relationship between GoldBod and the Bank of Ghana to safeguard Ghana's financial system and prevent similar losses in the future.