Kandifo Institute, a leading economic, governance, and leadership think tank, has described the recent publication by policy commentator, Senyo Kwasi Hosi regarding the US$214 million loss incurred under the Domestic Gold Purchase Programme (DGPP) as analytically flawed and methodologically weak.
According to the institute, the assertion that these significant financial figures represent an “acceptable policy cost” rather than a real economic loss is a dangerous narrative that threatens to undermine institutional accountability and central bank credibility.
“The Kandifo Institute submits that policy outcomes cannot be used to nullify institutional financial realities, particularly where a central bank-linked entity is concerned. An accounting loss incurred by GOLDBOD or the Bank of Ghana is, therefore, ipso facto an economic loss to the State. Relabelling such losses as ‘policy costs’ does not eliminate their economic incidence; it merely alters their rhetorical framing.”
Kandifo Institute
Expanding on the headline, the think tank argues that labeling a US$214 million deficit as a mere “policy cost” does not eliminate the economic impact on the Ghanaian taxpayer or the state’s fiscal health.
While the DGPP, operationalized through GOLDBOD, was intended to stabilize the cedi and curb gold smuggling, Kandifo Institute maintains that the resulting accounting losses are, in fact, economic losses that create contingent liabilities for the public sector.
The institute further challenges the attribution of Ghana’s recent macroeconomic gains solely to GOLDBOD, citing external factors such as elevated global gold prices and IMF-driven fiscal consolidation as the primary drivers of stability.
Clash Over “Policy Costs” vs. Financial Reality
The crux of the debate lies in Senyo Hosi’s argument that the US$214 million should be viewed as a strategic investment. Hosi believes GOLDBOD did not incur true losses because the program incentivized miners to sell through official channels by offering world-market prices and bonuses, effectively “buying” currency stability.
He argued that this strategy reduced gold smuggling and generated “savings” through lower cedi-denominated debt service and inflation moderation.
Essentially, Hosi posits that the financial dip on the balance sheet is a small price to pay for the broader economic welfare gains realized in 2025.
However, from an extractive and economic perspective, Kandifo Institute viewed this as “FX subsidisation” and a “structural policy failure.”
By absorbing foreign exchange differentials to pay miners bonuses, GOLDBOD is essentially operating a subsidy scheme that transfers market inefficiencies onto the state’s balance sheet.
“Sound economic governance requires that policy effectiveness and institutional sustainability be jointly satisfied, not traded off ex post,” the institute noted, warning that this model weakens the country’s macroeconomic architecture.
Methodological Flaws and Sustainability Risks
A significant portion of the institute’s critique focuses on the data used to justify the program’s success.
Hosi’s claims regarding the recovery of gold previously lost to smuggling rely heavily on COMTRADE mirror trade data.
The institute points out that such data is a “notoriously unreliable proxy” for illicit flows due to re-exports from refining hubs and reporting time lags. Without independent geological verification, attributing increased recorded exports solely to GOLDBOD’s intervention is, in their view, a result of “attribution bias.”
Furthermore, the institute warns that the current “success” of the program is precariously tied to high global gold prices. Should prices decline or external financing shocks occur, the current pricing structure would “amplify losses, increase recapitalisation risk and undermine monetary credibility.”
The think tank emphasizes that true welfare gains must come from increased productive capacity rather than nominal accounting improvements or “exchange-rate translation effects” that could vanish with market volatility.
Governance and the Path Forward
The normative implications of Hosi’s publication have also drawn fire from the think tank. Kandifo Institute rejects the idea that favorable short-term outcomes justify financial indiscipline. They argued that the US$214 million loss is “real, measurable, and borne by the public sector,” and that it limits future fiscal and monetary policy space.
Instead of “rhetorical reclassification,” the institute is calling for a more transparent approach that focuses on rigorous cost minimization and structural reforms to align the foreign exchange market.
The institute concludes that while the DGPP may have contributed to short-term stability, the financial fallout cannot be ignored.
They maintain that the appropriate response for state institutions is not to hide behind the label of “policy costs” but to engage in transparent recognition and alignment of the gold trading framework with sustainable economic principles.
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