Beyond the Numbers: Understanding the Bank of Ghana’s Domestic Gold Purchase Programme

The Bank of Ghana's Domestic Gold Purchase Programme (DGPP) is often misunderstood due to its headline-grabbing GH¢21.89 billion cost, which understandably raises concerns among Ghanaians amid economic hardships. However, this figure represents more than just a cash outflow; it is an accounting adjustment.

Ghana, like many countries, faces the challenge of securing foreign exchange reserves. The DGPP was designed to address this by purchasing domestically produced gold, exporting it, and converting the proceeds into foreign currency reserves. This approach contrasts with borrowing dollars, which creates repayment obligations.

The GH¢21.89 billion is primarily an accounting adjustment due to the difference between the market acquisition rate and the official recording rate. This is in line with International Accounting Standard (IAS) 21 and Ghana's own regulations. The gold was purchased at market prices to prevent it from being smuggled or traded illegally. The programme resulted in US$13.8 billion in reserves, showing that gold production can provide a domestic source of foreign exchange.

In 2025, the programme's cost appeared larger due to the cedi appreciating by 40.7%, which widened the gap between the market acquisition rate and the official recording rate. Additionally, the programme nearly doubled in scale, purchasing 110.99 tonnes of gold valued at US$11.4 billion.

Critics might argue that buying gold at market prices is disadvantageous. However, this strategy prevents gold from being sold to informal buyers or smugglers, as seen in the drastic drop following a 3% withholding tax in 2021. The net cost of the programme, after accounting for government costs and gold sales, was GH¢9.05 billion. Thus, the program, while substantial, represents a strategic move to diversify Ghana's foreign exchange reserves and reduce dependency on foreign currencies.