GoldBod losses too costly to sustain, govt plans major cut, says Bokpin

Economist Professor Godfred Alufar Bokpin has warned that the domestic gold purchase programme, known as GoldBod, is too costly to sustain due to substantial losses. Despite the programme's success in reducing gold smuggling and increasing foreign exchange, Prof. Bokpin claims the losses are significant. Speaking to Joy News, he acknowledged that the programme has helped bring foreign exchange into the country that would have otherwise been lost to smuggling.

However, he emphasized that the gains must be weighed against the significant financial burden. Prof. Bokpin attributed the losses partly to weaknesses in the programme's design and argued that better planning could have minimized these losses. He cautioned against attributing macroeconomic stability gains solely to GoldBod, stating that fiscal and monetary authorities primarily hold responsibility.

Prof. Bokpin also highlighted that the fiscal cost of the programme, including the abolition of the 1.5% withholding tax on gold from artisanal and small-scale miners, could have contributed to revenue for infrastructure and public services. He cautioned that the full cost of the intervention should be assessed across the entire gold value chain, potentially exceeding the recorded losses.

Despite acknowledging the programme's benefits, Prof. Bokpin noted that the government recognizes the losses cannot continue at their current level. He said the government and associated institutions are pursuing an exit plan to sharply reduce the losses, aiming to bring them down from around 17% or 14.5% to about 5%.