A Technical Report Presented to GoldBod
by
Prof. Festus Ebo Turkson
(Department of Economics, University of Ghana)
Peter Junior Dotse
(Department of Economics, University of Ghana)
Prof. Agyapomaa Gyeke-Dako
(Department of Finance, UGBS, University of Ghana)
Dated: 4th January 2026
Executive Summary
Purpose
This report evaluates the macroeconomic impact of the Ghana Gold Board (GoldBod) using conservative assumptions and verifiable data. It compares quantifiable benefits—particularly from reduced gold smuggling and non-debt foreign exchange (FX) inflows—with the reported trading losses of the Bank of Ghana (BoG).
Key Findings
GoldBod Significantly Reduced Gold Smuggling
- Recorded artisanal and small-scale mining (ASM) gold exports increased from 63.6 tons in 2024 to 103.0 tons in 2025.
- The incremental 39.4 tons is plausibly gold previously lost to smuggling that has now been formalised.
- Valued conservatively at US$96.5 million per ton, this represents US$3.8 billion in additional FX entering the formal system.
Formalisation Benefits Far Exceed BoG’s Reported Loss
- The IMF reported a BoG trading loss of US$214 million (≈ GHS 2.4 billion).
- A direct comparison shows:
- Benefit–Cost Ratio ≈ 18:1
- In break-even terms:
- Formalising just 2.2 tons of gold would offset the reported loss.
- Complete formalisation is about 18 times this threshold.
Large Financing Savings from Non-Debt FX Inflows
- GoldBod-enabled ASM exports in 2025 amounted to US$10.8 billion.
- If Ghana had borrowed externally to mobilise equivalent FX, annual interest costs would have been:
- Between US$756 million – US$1.08 billion (at 7–10% borrowing rates).
- Focusing only on the plausible reduction in smuggling:
- Avoided annual interest costs are between US$266–380 million.
- These are recurring annual benefits, not one-off gains.
Broader Macroeconomic Gains
GoldBod-supported FX inflows contributed to:
- Higher international reserves (≈ US$11–12 billion)
- Exchange-rate stabilisation and appreciation relative to IMF budget assumptions
- Lower domestic cost of external debt service (≈ GHS 6.2 billion)
- Reduced import bill (Jan–Oct 2025) valuation (≈ GHS 50.6 billion)
- Disinflation, through reduced exchange-rate pass-through
Why the BoG “Loss” Is Misunderstood
- Most of the reported BoG loss reflects accounting translation effects, not cash losses.
- Gold is purchased at near-retail exchange rates to prevent smuggling, but FX inflows must be booked at the lower interbank rate.
- The true economic cost (fees, purity losses, offtake discounts) is estimated at ~2.5% of gold value, far lower than headline loss figures.
GoldBod has delivered substantial, measurable macroeconomic benefits that exceed its narrow accounting costs. The programme converts illicit gold flows into formal FX, strengthens Ghana’s external position, reduces reliance on costly borrowing, and supports macroeconomic stability.
Key Policy Directions Going Forward
- Sustain price competitiveness to prevent a return of smuggling.
- Improve transparency by clearly separating accounting effects from economic costs in BoG reporting.
- Gradually reduce policy costs as FX market conditions normalise.
- Strengthen governance and oversight to ensure long-term credibility.
- Manage transition risks carefully as GoldBod assumes fuller trading responsibility.
- Sustain the FX stability through structural transformation, fiscal discipline, and enhanced law enforcement to minimise and deter smuggling.
- Internalise the policy cost as a quasi-fiscal cost and treat it as a liability (expense for the government) and fund it annually in the budget.
GoldBod should be regarded not as a profit-driven trading entity, but as a tool for macroeconomic stabilisation and formalisation. Based on available evidence, it serves as a high-return policy intervention for Ghana’s economy.
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