Author: Dr. John Osae-Kwapong, Democracy and Development Fellow, CDD-Ghana, and Project Director, the Democracy Project
The International Monetary Fund (IMF), noted in a recent report (IMF Country Report No. 25/343, 2025) the following: “In 2025 through end-Q3, losses from the artisanal and small-scale (ASM) doré gold transactions component of G4R have reached US$214 million (0.2 percent of GDP), mostly on trading losses but also on GoldBod off-takers’ fees.” The Gold for Reserves (G4R) is a component of the Domestic Gold Purchase Program (DGPP).
In response to this disclosure, the minority caucus in parliament held a press conference, demanding that – a) the Central Bank Governor and CEO of GoldBod appear before the parliamentary committee on economy and development; b) a parliamentary ad hoc investigative committee with subpoena powers be set up; and c) criminal prosecution, including funds recovery in case of evidence of corruption.
Last Saturday, on Joy News’ Newsfile, the CEO of GoldBod took time to respond to the minority caucus’s concerns. The Bank of Ghana (BOG) has also issued a statement in response to the developments as noted in the IMF Staff Report.
Policy activists, including the likes of Mr. Bright Simons, have also weighed in on the matter. At the heart of the heated exchanges and strong disagreements over the issue is the vexing problem of how to resolve one of the key dilemmas of public policy. Let me explain.
The Policy Dilemma
Citizens expect governments to solve public problems. In response, governments design interventions by drawing on various tools of public policy at their disposal. Such interventions come with both costs and benefits.
The goal of every government, when designing a policy intervention, is that the benefits would far outweigh the costs. The question, though, is what are the acceptable costs of policy interventions when weighed against the benefits? And in public discourse, where should the focus be? On the benefits, costs, or both?
In my understanding of the BOG’s press release as well as the submissions of GoldBod’s CEO on Newsfile, the public is urged to place the $214million within a bigger context – the benefits of the policy intervention to the overall economy of the country. In their view, the macroeconomic benefits such as currency stability, improved reserves, access to foreign exchange, etc. far outweigh the associated costs of DGPP.
Mr. Simons, a policy analyst in civil society, argues, which I agree with, that we cannot overlook the cost of public policy interventions. As a matter of fact, a close look at Text Figure 9, in the IMF Staff report, shows that the cumulative costs of the G4R program have been steadily rising.
And in the same graph, I noticed that when the cumulative costs are juxtaposed against the cumulative gold quantity, the gap appears to be narrowing. In my layman’s view, the increasing cumulative costs do not appear to be resulting in a higher net gain of cumulative gold quantity. Again, this is part of the policy efficiency concerns raised by Mr. Simons.
Both sides of the argument raise very legitimate points. Those projecting benefits force us to confront the potential downside of not having the policy intervention. For example, would we rather have a macroeconomic environment with an unstable currency that keeps depreciating? For most people, I am sure the answer is no.
Those projecting the costs, on the other hand, force us to confront the financial implications of policy interventions. Are we risking diminishing marginal returns at some point if the cost trajectory, as shown in the IMF Staff report, continues to trend upwards? Is the cost, even if deemed acceptable, sustainable?
Resolving The Dilemma
How do we resolve this dilemma? The benefits of policy intervention and its acceptable costs do not lend themselves to easy and simple resolutions. It is, however, a delicate balancing act complicated in electoral democracies by partisanship.
What partisanship does is it creates two opposing camps – those who roll out interventions are reluctant to acknowledge any faultlines, including cost concerns, while those who do not are reluctant to acknowledge the good by focusing predominantly on the faultlines, including cost concerns.
This means the job of every government is to devise strategies on how best to manage this balancing act between the cost of important policy interventions and the national benefits in a partisan environment. That is why it does the country and the policy intervention itself no good to treat such matters as either-or propositions.
When policy interventions work as designed, the benefits are collective. At the same time, the consequences are collective when they fail to work as designed. So, while we champion the benefits of DGPP, and the country is experiencing them, care must be taken not to be oblivious to cost concerns. If at some point the cost of a policy intervention becomes worrying, it is perfectly okay to make the necessary adjustments.
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