Mr. Bright Simons, Policy Analyst and Vice President of IMANI Centre for Policy and Education, has sparked a significant debate in the Gold Board’s purported gains by asserting that GoldBod’s role in the Cedi’s 2025 appreciation is fundamentally limited.
While the currency saw a remarkable 24 percent rise from the end of 2024 to late 2025, Simons argued that this strength was primarily driven by a 70 percent surge in global gold prices and IMF-led fiscal discipline rather than state-led gold programs.
His analysis suggests that the actual impact of GoldBod on the exchange rate is secondary, estimated at approximately 3 percentage points, whereas external market rallies historically account for much larger shifts in forex strength.
“GoldBod’s maximum plausible contribution is therefore bounded and secondary. 3 percentage points would be a fair estimate. The remaining improvement reflects IMF discipline, debt restructuring, and policy intervention that skewed it away from its likely natural path.”
Mr. Bright Simons
Further clarifying the fiscal health of the institution, Simons highlights that GoldBod has incurred staggering losses of $214 million on $5 billion worth of gold transactions.
These losses are not merely administrative but structural, as the entity is frequently forced to “buy high and sell low,” creating a loss-rate that now exceeds the inefficiencies seen in the cocoa sector.
Without continuous liquidity support from the Bank of Ghana (BoG), the entity would face insolvency within approximately 11 months, as its current budget allocation of $279 million remains insufficient to cover its high burn rate.
This reality challenges the popular narrative that the program is a cost-effective tool for monetary stability, revealing instead a reliance on expensive central bank intervention and “opaque subsidies” that threaten long-term reserve accumulation.
Mechanics of Structural Loss and Sterilization
Beyond the immediate trading deficit, the Bank of Ghana faces escalating “sterilization and opportunity costs” that drain national resources.
Because the BoG must “create” the money used to purchase gold from local miners, it is subsequently forced to mop up that liquidity to prevent a spike in inflation.
This cycle makes the entire operation an expensive endeavor that ultimately weakens the central bank’s capacity to cushion the Cedi during future downturns.
If the global gold price were to fall, these structural risks would be “huge magnified” in a dangerous procyclical manner, potentially reversing the gains seen in 2025.
Misconceptions and the Multi-Variable Reality
A major misconception in the current economic discourse is the idea that the Cedi’s 24 percent appreciation was a direct result of GoldBod’s market presence.
In reality, economists prioritize over 15 variables when analyzing exchange rates, and while gold exports are crucial, they do not dictate rates in isolation.
Historically, even the most extended gold rallies explain only about 8 percentage points of FX strength; therefore, the massive gains in 2025 must be attributed to the “IMF discipline” and the successful restructuring of national debt.
These factors, combined with the record-breaking gold prices, did the heavy lifting, leaving GoldBod’s contribution as a minor, albeit visible, factor.
Sustainability Risks in an Opaque Framework
Building national currency stability on “opaque subsidies” is a strategy that many policy analysts have warned against since the inception of these programs in 2022.
The lack of transparency regarding the true cost of these “gold gigs” masks the fact that the ledger must eventually balance, often at the expense of the taxpayer or the central bank’s net reserves.
For the extractive sector to contribute meaningfully to the economy, it must move away from loss-making state intermediation and toward market-driven transparency.
As it stands, the current stability is a fragile construct that relies heavily on the hope that “gold prices stay up,” as any market correction could expose the underlying insolvency of the GoldBod model.
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