Mr. Bright Simons, a seasoned policy analyst and the Vice President of IMANI Africa, has formally dismissed the narrative that the Gold Purchase Program (GoldBod) is the primary driver behind the recent 60% surge in small-scale mining (ASM) output.
In a detailed technical rebuttal, the policy analyst challenged a report authored by government-aligned economists, arguing that the attribution of increased gold volumes to “smuggling suppression” is fundamentally flawed.
Bright Simons posited that this surge is more likely a reaction to record-high global gold prices rather than domestic regulatory interventions, suggesting that the current institutional framework is absorbing unnecessary fiscal shocks.
“The key point is that between 2024 and 2025, small-scale gold output increased by 60% due to GoldBod’s ‘smuggling suppression’ and this allowed more gold dollars to accrue to the Bank of Ghana for use in stabilising the currency. I think that point is wholly flawed as we have had far bigger jumps in recent history that had nothing to do with GoldBod. The idea that high gold prices have nothing to do with anything is also highly flawed.”
Bright Simons
The critique centered on the premise that the Bank of Ghana (BoG) has been forced into a “solo venture” that creates lumpy foreign exchange dynamics and exacerbates market volatility.
By monopolizing the gold supply to artificially stabilize the Cedi, Simons argues that the state has created a costly interventionist cycle that ignores historical production jumps unrelated to GoldBod.
He asserted that the current policy fails to account for how commercial bank FX dynamics are sidelined, ultimately shifting the entire burden of risks and financial losses onto the central bank’s balance sheet, a move he describes as unsustainable under current “katanomic” conditions.
Deconstructing the Smuggling Suppression Myth
To understand the gravity of Simons’ rejection, one must look at the “inconsequential arithmetic” often cited by proponents of the current regime.
The government’s establishment argues that by funneling ASM gold directly through the state, they have choked off illicit trade routes.
However, extractive experts note that ASM operators are historically price-sensitive; when global prices hit unprecedented peaks, production naturally ramps up regardless of the buyer.
Bright Simons highlighted that by pushing all gold to the BoG, the system waits until supply tightens before “intervening aggressively,” which creates a “lumpiness” that actually hurts the Cedi’s stability in the long run.
Furthermore, the comparative analysis of cross-country experiences reveals a startling trend: other nations successfully implement “Gold-for-Reserves” programs without dumping the inherent trading risks on their central banks.
In Ghana’s case, the lack of transparent cost-absorption through the national budget has led to an alignment crisis.
Bright Simons agrees with the Governor of the BoG that the government should transparently own these losses, rather than hiding the fiscal strain within the central bank’s operations.
This lack of transparency is what he terms “katanomics,” a state of policy-making that lacks critical audience oversight and relies on opaque simulations.
Trust-Chain Model: A New Extractive Governance
In place of the current “solo venture,” Bright Simons proposed the “Trust-Chain Model,” a governance framework designed to move GoldBod “upstream.”
This shift would transition the state from a primary trader to an oversight entity, empowering the private market to handle trading under transparent, pre-defined rules.
By decentralizing the gold-to-dollar conversion process, the model aims to make currency stabilization a “shared responsibility” involving the finance ministry, private investors, and the mining community.
This would effectively mitigate the “relentless intervention spree” that currently seeks to fix the Cedi at what Simons describes as an “unrealistic level.”
The Trust-Chain Model is anchored in what Simons calls “Smart Modelling,” which establishes a “reasonable band” for Cedi-to-USD fluctuations.
Instead of the BoG desperately “suctioning all the gold in Ghana,” the model uses simulations to determine the rational volume of gold-dollars needed to backstop the currency.
This data-driven approach allows the state to gauge the right “strength” of the Cedi based on actual market conditions rather than political mandates.
By doing so, the government can achieve its stabilization objectives without directly “footing the entire bill” for the operational losses and market premiums.
Balancing Policy Tightropes and Fiscal Costs
The ultimate benefit of the Trust-Chain proposal lies in its ability to balance the “policy tightrope” between gold accumulation and intervention costs.
Through “katanomic modelling,” Bright Simons has implemented a dashboard-widget that allows the public to visualize how certain policy levers, when pushed too far, inflate the cost of state intervention.
If GoldBod adopts this model, it could transition from a loss-making entity into a lean regulatory body that facilitates liquidity through commercial banks, thereby reducing the “lumpiness” of FX supply that currently haunts the Ghanaian market.
To truly win, Simons suggests that scholars must focus on bounding the “acceptable level of losses justified by the policy benefit.”
This requires acknowledging that the Cedi’s performance is not a product of gold reserves alone.
By adopting a “Trust-Chain,” Ghana can harness the expertise of the private sector to manage price volatility and logistics, while the BoG focuses on its core mandate of price stability.
This systemic shift would ensure that the benefits of Ghana’s extractive wealth are not swallowed by the costs of its own defense, creating a more resilient and transparent economic environment for all stakeholders.
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