Bright Simons, a renowned policy analyst and the Vice President of the IMANI Centre for Policy and Education has raised critical alarms regarding a new proposal spearheaded by a prominent traditional leader and former multinational banking executive, Chief Alhassan Andani to overhaul Ghana’s gold purchasing framework.
The proposal suggests transitioning the financing of small-scale gold acquisitions from the state-led “GoldBod” model to a private-sector-led structure involving commercial banks.
While the initiative aims to relieve the fiscal pressure on the state, Bright Simons argues that the restructuring is “clever” yet “well-timed” to mask deeper structural flaws that could leave the nation’s financial regulators exposed to the same risks they are currently trying to escape.
“The proposal doesn’t move the Bank of Ghana out of the firing line; it just rearranges the targeting rules. While private banks are being brought into the room, the BoG remains written into the deal as the transaction obligor and foreign-exchange allocator. This model fails to address the core gaps that deserve their own thesis regarding the country’s financial stability.”
Bright Simons
The context of this intervention follows a period of staggering financial volatility where Ghana’s Gold Board reportedly “burned through GH¢88.52 billion” (approximately $7.2 billion) in just the first nine months of 2025.
During this window, the entity purchased gold from small-scale miners but only recouped GH¢86.51 billion upon resale, leaving a massive deficit in its wake. This aggressive trading cycle resulted in the Bank of Ghana (BoG) holding roughly $214 million in losses, a development that drew “disapproving” stares from the International Monetary Fund (IMF).
The new proposal, put forward by the Chairman of LVSafrica who serves as a “mighty traditional chief” and chair of state enterprises posits that by having private banks fund these purchases, the central bank can finally step back from the direct line of fire.
The LVSafrica Model and the Illusion of Risk Transfer
The crux of the LVSafrica proposal rests on the prestige and professional pedigree of its leadership, leveraging the Chairman’s “decades-long” experience as a CEO of a major multinational bank to instill confidence in a private-sector solution.
Under this “regally” presented plan, the burden of liquidity for gold mopping would shift to private commercial banks, theoretically insulating the public purse from the massive capital outlays seen in 2025.
By positioning private capital as the primary engine for the gold deal, proponents suggest that the “Problem [is] solved” regarding the central bank’s balance sheet depletion.
However, a technical audit of the “fine print” by policy analysts suggests this shift may be more cosmetic than structural. Critics note that private banks “already get some of the gold dealing gigs” from the central bank, albeit on a smaller scale.
Merely increasing their participation does not inherently fix the underlying price volatility or the operational inefficiencies that led to the $214 million loss.
The concern is that without a fundamental change in how the gold is valued and hedged, the private banks may simply become conduits for the same systemic risks previously borne by the state.
Structural Gaps: The BoG as the Perennial Obligor
The most damning critique of the current proposal is the continued, heavy reliance on the Bank of Ghana as a backstop.
Despite the rhetoric of “private funding,” the deal structure reportedly retains the BoG as the “transaction obligor, escrow bank, and foreign-exchange allocator.”
In financial terms, an obligor is the party legally bound to pay a debt; if the BoG remains in this role, the state’s credit and reserves are still the ultimate collateral for the deal.
This “clever” arrangement ensures that if the private banks encounter liquidity hurdles or if gold prices dip unexpectedly, the central bank is still the “target” for any resulting losses.
Furthermore, by acting as the “foreign-exchange allocator,” the BoG remains tethered to the transaction’s currency risks.
In a market where the Cedi’s stability is often under pressure, committing the central bank to provide forex for these gold-backed structures could exacerbate the very inflationary pressures the IMF has warned against.
The proposal effectively creates a circular flow of risk: private banks provide the Cedis, but the BoG guarantees the mechanics, meaning the “something had to give” moment hasn’t actually resulted in a departure from state-sponsored risk.
Advocating for a “Better Approach” in Extractive Governance
Bright Simons and other reformists argue that for a gold-purchasing model to be truly sustainable, it must decouple the central bank’s regulatory and reserve-management functions from the commercial mechanics of mining trade.
A “better approach” would involve a total removal of the BoG from the roles of “escrow bank” and “obligor.” Instead, the proposal should focus on building a transparent, market-driven exchange where private players bear the full weight of the “firing line” without state guarantees.
This would force a more rigorous “crunching [of] numbers” by analysts to ensure that deals are commercially viable on their own merit.
For the Ghanaian extractive sector to thrive without jeopardizing national fiscal health, the governance of gold must move beyond “rearranging the targeting rules.”
True reform requires addressing the “serious gaps” in the Gold Board’s operational mandate and ensuring that the IMF’s concerns are met with genuine risk-transference rather than sophisticated accounting maneuvers.
As the “Big Chief from the North” puts his cards down, the industry waits to see if the government will double down on this familiar structure or pivot toward the more insulated, transparent model advocated by the nation’s leading policy watchdogs.
READ ALSO: Ghana-UK Trade Pact Hits Five-Year Growth Milestone
