The International Monetary Fund (IMF) has reaffirmed its assessment that the Bank of Ghana’s (BoG) Domestic Gold Purchase Programme (DGPP), operated in collaboration with the Ghana Gold Board (GoldBod), incurred a quasi-fiscal loss of approximately US$214 million.
This valuation, detailed in the Staff Report for the Fifth Review of Ghana’s Extended Credit Facility, underscores the financial cost of a policy that the Fund simultaneously credits with stabilizing the cedi and rebuilding international reserves.
By classifying the deficit as “quasi-fiscal,” the IMF emphasizes that while the loss does not appear on the central government’s immediate budget, it remains a tangible liability for the Ghanaian state.
“The loss stemmed from trading activities, fees, exchange rate movements. And to help address this, our recommendation is to strengthen transparency, governance, and risk management, especially for the GoldBod-linked channel under this domestic gold purchase program. We also strongly recommend that the losses should be brought on balance sheet rather than held on the balance sheet of the Central Bank.”
Julie Kozack, IMF Director of Communications
The Fund’s stance serves as both a validation of the programme’s macroeconomic utility and a stern warning regarding its accounting and governance structures.
The US$214 million loss is attributed to a combination of trading activities, intermediary fees, and the inherent volatility of exchange rate movements.
During a period of severe economic distress, the DGPP allowed the central bank to accumulate non-debt foreign exchange reserves, which were instrumental in easing pressure on the forex market.
However, the mechanism of purchasing gold at market-competitive rates from the artisanal and small-scale mining (ASM) sector, often using multiple exchange rate benchmarks, created a financial gap.
To safeguard the long-term solvency of the Bank of Ghana (BoG), the IMF is now advocating for “stronger transparency, governance, and risk management” within the GoldBod-linked supply chain.
A critical component of this recommendation is the migration of these losses from the central bank’s balance sheet to the national fiscal budget, ensuring the BoG remains “well” and focused on its core mandate of price stability.
Navigating the Controversies of the BoG-GoldBod Nexus
The DGPP has become a lightning rod for controversy, primarily due to the opacity surrounding the “Gold-for-Reserves” and “Gold-for-Oil” schemes.
Critics have long argued that the programme lacks a clear legislative framework, creating a “monopoly” environment that shields operational inefficiencies from public scrutiny.
Tensions have peaked over whether the reported US$214 million is a “trade loss” or an “accounting translation effect.”
While GoldBod management maintains the board recorded a surplus from its service fees, the IMF’s data suggests the broader system where the BoG acts as the principal, is bleeding value.
The conflict of interest involving private off-takers and the high costs of the ASM supply chain have only fueled demands for a more rigorous, independent audit of the entire gold-to-reserve pipeline.
The Perils of Hidden Quasi-Fiscal Liabilities
The IMF’s insistence on moving these losses to the government’s fiscal balance sheet is rooted in the “danger” of eroding the central bank’s equity.
Holding quasi-fiscal losses on the BoG balance sheet can impair the bank’s ability to conduct effective monetary policy, as it essentially “monetizes” the deficit.
This practice risks triggering inflationary pressures and creates a “fiscal illusion,” where the government’s actual deficit appears smaller than it truly is.
By masking the cost of the gold programme, the state delays necessary fiscal adjustments, potentially leading to a larger, more sudden crisis in the future.
Experts warned that unless these losses are treated as formal state expenditures, the BoG’s balance sheet integrity will continue to be compromised by commodity market risks it is not designed to absorb.
Strengthening Extractive Governance and Risk Reforms
Addressing these financial leakages requires a structural overhaul of how GoldBod interacts with the BoG. The IMF recommends that the government “internalize the policy cost” as a direct expense in the annual budget rather than an off-balance-sheet item.
This would subject the gold purchase costs to parliamentary oversight, forcing a higher standard of accountability for every ounce of gold sourced. Furthermore, refining the pricing mechanism for ASM gold is essential to eliminate the arbitrage opportunities that contribute to exchange rate losses.
As Ghana moves forward, the focus must shift from merely accumulating gold volumes to ensuring that the “macroeconomic stabilization” benefits are not outweighed by the “quasi–fiscal” costs borne by the taxpayer.
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