Domestic Gold Purchase Programme: ‘US$1.7bn loss is largely a book issue’ — IEA

A significant portion of the reported $1.7 billion loss linked to Ghana's Domestic Gold Purchase Programme is due to accounting and valuation treatment rather than an actual economic loss, according to the Institute of Economic Affairs (IEA). Professor Alexander Bilson-Darku, Director of Research at the IEA, stated that the figure should be properly broken down before drawing conclusions about the financial implications of the gold purchase programme.

He explained that the first two components of the loss represented payments made by the central bank to the Ghana Gold Board (GoldBod) for gold purchased and exported on behalf of the Bank of Ghana, which are considered revenue to GoldBod and not a loss to the state. The third component, accounting for nearly 90% of the reported loss, resulted from the valuation method used by the Bank of Ghana.

Professor Bilson-Darku cautioned against treating the valuation difference as a significant cash loss to Ghana, emphasizing that it was merely a bookkeeping issue and not a substantial financial loss to the nation. He stressed the importance of considering the broader relationship between the Bank of Ghana and GoldBod, both of which are state institutions, when interpreting the reported loss.