Prof. James Atsu Amegashie, Professor of Economics at the University of Guelph in Canada and a Fellow of the Center for Democratic Development (CDD-Ghana), has waded into the brewing contention over the $214 million loss reported by the IMF, asserting that the financial hit must be recorded on the books of the Ghana Gold Board (GoldBod) rather than the Bank of Ghana (BoG).
The controversy centers on whether the deficit, stemming from the Domestic Gold Purchase Program (DGPP), should be absorbed by the central bank as a “strategic policy cost” or reflected in the government’s fiscal budget.
While the IMF advocates for the latter, GoldBod officials have argued that the loss is a byproduct of a deliberate policy design intended to stabilize the national economy and bolster foreign reserves.
“Thus, from the standpoint of fiscal and monetary discipline and the management of perverse incentives, the loss of $214 million in 2025 should be on the books of the GoldBod. It appears that the BoG will assume the loss. Going forward, the GoldBod has taken full responsibility for all aspects of its operations.”
Prof. James Atsu Amegashie
The core of the dispute lies in the trade dynamics where the BoG provided 112.65 billion cedis to GoldBod for gold acquisition, but received only 109.14 billion cedis back after exports, a net shortfall of approximately 3.5 billion cedis.
Prof. Amegashie, explained that this gap exists because GoldBod purchased gold at retail market exchange rates while the proceeds were valued at lower BoG interbank rates. He cautioned that while the central bank can technically “print” cedis to cover its own losses, GoldBod as a government agency cannot, and must eventually find commercial ways to offset such deficits to remain viable.
Danger of Central Bank Monetization and MMT Risks
The debate carries significant weight because shifting commercial losses to the central bank mirrors the risks associated with Modern Monetary Theory (MMT), where a sovereign issuer prints money to finance government spending.
Prof. Amegashie warned that such “quasi-fiscal activities” can lead to a lack of accountability, noting that “the BoG-GoldBod arrangement was, in effect, direct financing of government operations by the BoG.”
If the central bank becomes the permanent absorber of GoldBod’s trading losses, it risks undermining its independence and triggering the kind of hyperinflation seen in Latin American episodes or historical Greece, where the central bank was at the “beck and call” of the government.
While GoldBod CEO Sammy Gyamfi contends that these losses are a “necessary evil” that achieved a 40% cedi appreciation and reduced inflation to 6%, Amegashie argues that these macro benefits do not exempt an agency from commercial reality.
He posited that if the BoG is forced to carry the loss, it sets a dangerous precedent for other state-owned entities like the ECG to justify inefficiencies under the guise of “national benefit.”
The relevance of Amegashie’s view lies in protecting the BoG’s mandate; as he states, “the BoG is not a gold trading organization,” and its primary focus must remain on price stability rather than subsidizing government trading agencies.
Institutional Independence and Incentive-Compatible Structures
As of 2026, GoldBod has moved from being a mere agent of the BoG to taking full responsibility for its gold purchase and export operations.
This shift is critical for ensuring that the agency operates under a “proper and incentive–compatible arrangement” where it must manage its own revenue and costs.
Prof. Amegashie emphasized that unlike the central bank, which can generate liquidity for cedi-denominated losses, GoldBod must be profitable to avoid legal action from creditors or the inability to purchase future gold stocks.
Shifting the $214 million loss to the BoG would essentially hide a fiscal deficit, potentially leading to “monetization of the budgetary deficits” which historical data suggests is a recipe for long-term economic instability.
By insisting the loss stays with GoldBod, economists aim to ensure that the “strategic expenses” are transparently accounted for in the national budget. This transparency is vital for Ghana to maintain its credibility under the IMF program and to ensure that the extractive sector contributes to, rather than drains, the nation’s financial health.
Protecting the Mandate of the Bank of Ghana
The long-term danger of blurring the lines between the BoG and GoldBod is the erosion of the central bank’s “money-printing” discipline.
Prof. Amegashie highlighted that while the BoG has the tools to absorb cedi losses, its capacity to manage dollar-denominated losses is limited, and it should not be burdened with the risks of active gold trading.
He argued that the BoG’s role should be limited to reserve management similar to central banks in non-producing countries like Japan or the UK rather than taking on the commercial risks of an extractive industry participant.
Reflecting the $214 million loss on GoldBod’s books forces the government to confront the true cost of its “strategic” interventions.
It ensures that the impressive gains in inflation reduction and exchange rate stabilization are not built on a foundation of hidden debt.
For the extractive sector, this means GoldBod must now operate with the efficiency of a global gold trader, ensuring that its purchase and sale rates are sustainable without requiring central bank bailouts.
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