A Professor of Finance at the University of Ghana Business School, Godfred Bokpin, has said the government’s decision to move the financing of gold purchases away from the Bank of Ghana’s balance sheet is a step in the right direction.
He said, nevertheless, the true cost of the Domestic Gold Purchase Programme would remain understated unless the government accounted for the full value chain, including the environmental damage associated with gold mining.
Prof Bokpin said the programme’s reported US$1.7 billion loss in 2025 was linked to a pricing regime which offered discounts and incentives without properly accounting for their cost.
He was speaking in a radio interview on Accra-based Joy FM on Monday, August 24, 2026.
Prof Bokpin added that when the full value chain was considered, “the losses actually exceed the $1.7 billion.”
Programme cost
He said the financial performance of the programme could not be assessed by looking at gold inflows alone.
According to him, although the programme brought in $10.9 billion against gold purchases of about $9.8 billion, several other costs were left out of the calculation.
He mentioned discounts, exchange rate spreads and transaction costs, as well as revenue forgone by the government after the abolition of the 1.5 per cent final withholding tax.
Prof Bokpin said the tax was removed to make the arrangement more competitive, but the decision also meant that the government gave up revenue which could otherwise have been used to fund roads, schools and hospitals.
He described a narrower interpretation of the figures as “a daft position”.
GoldBod response
Prof Bokpin’s comments come amid a public disagreement over the financial performance of the gold-buying programme.
The Chief Executive Officer of the Ghana Gold Board (GoldBod), Mr Sammy Gyamfi, has rejected claims that GoldBod caused a loss to the state.
BoG balance sheet
Prof Bokpin, whose comments did not directly refer to Mr Gyamfi’s statements, said moving the programme’s costs away from the Bank of Ghana’s balance sheet and onto the fiscal side was a positive development.
He said the central bank’s balance sheet had been weakened “since the third quarter of 2021” by the transfer of quasi-fiscal activities onto its books.
He argued that treating such costs as fiscal expenditure from the beginning would have resulted in clear debt formation and prompted closer accounting of the costs involved.
Prof Bokpin said the Bank of Ghana’s net equity position stood at negative $9.6 billion at the end of 2025.
He said the position would eventually require fiscal transfers to recapitalise the central bank.
Environmental cost
Prof Bokpin also welcomed other reforms, including a 50 per cent reduction in charges and a narrower gap between the Bank of Ghana’s buying rate and the market exchange rate.
He said those measures alone would not address the wider problem unless Ghana adopted a value-chain approach which accounted for the environmental cost of the gold boom.
“If you put all of these things together, through the analysis, and you’re able to say that we are far better off, then that’s good news. But until you do that, what is the gain?” he asked.
Prof Bokpin said the destruction of water bodies linked to illegal and irresponsible small-scale mining represented an “environmental subsidy” which had not been included in assessments of the programme’s success.
Asked whether Ghana was better off as a result of the programme, he said, “We are not better off. It’s a selfish position to think that you can cause such harm to the environment and water bodies in the name of macroeconomic stability and say you have gain.”
Gold price risk
Prof Bokpin also cautioned that Ghana’s current macroeconomic stability remained vulnerable to a fall in global gold prices.
He said a 40 per cent drop in the price of gold could reverse the gains within six to eight months.
He referred to historical patterns in which commodity prices had tended to experience major corrections roughly once every decade.
Fiscal gains
On Ghana’s improved fiscal position, including the reported reduction in debt servicing to below 20 per cent of revenue, Dr Bokpin credited the domestic debt exchange programme, Ghana’s Eurobond holders and expenditure controls under the Finance Minister, Dr Cassiel Ato Forson.
He said those gains should not be attributed to the gold purchase programme.
Prof Bokpin drew a parallel with Ghana’s position after completing the Highly Indebted Poor Countries initiative in 2004 and the Multilateral Debt Relief Initiative in 2006.
At the time, Ghana’s debt-to-GDP ratio fell below 30 per cent, but the country returned to the International Monetary Fund for a new programme by 2009.
“Within three years, the fiscal space we are celebrating today, we celebrated that also in 2006. Within three years, the fiscal space has been dissipated,” he said.
He urged the government to “put in place the right structures, spend efficiently, borrow prudently, invest it in enhancing the cash flow generating capacity of the economy”.
