GoldBod’s gains must be weighed against full cost to Ghana – Prof. Bokpin

Economist and Professor at the University of Ghana Business School, Prof. Godfred Alufar Bokpin, has called for a comprehensive assessment of the economic costs and benefits of the Domestic Gold Purchase Programme (DGPP) rather than focusing only on the gains recorded by the Ghana Gold Board (GoldBod).

He said the programme should be assessed across its entire value chain, including the Bank of Ghana, GoldBod, aggregators and off-takers, to determine its overall impact on the Ghanaian taxpayer.

His comments come amid a raging debate over losses associated with the programme and whether those losses should be attributed to GoldBod or the Bank of Ghana.

GoldBod has defended its role in the programme, while critics have questioned the cost of accumulating foreign exchange reserves through domestic gold purchases.

Speaking on Accra-based TV3’s KeyPoint programme on Saturday, August 22, Prof. Bokpin said GoldBod’s contribution to increased foreign exchange inflows was significant but should not be assessed in isolation from the costs incurred by the state.

“We should adopt that value chain approach to accounting for this, rather than saying that it's not part of the [programme]. Because the whole plan was, how do we pay the highest possible price,” he said.

Prof. Bokpin said the programme was designed to make domestic gold purchases more attractive by offering competitive prices, which helped GoldBod crowd out other buyers and reduce incentives for gold smuggling.

He said the strategy may have contributed to significant foreign exchange inflows but also meant the country had to absorb substantial costs, including exchange-rate variations, spreads and tax concessions.

He cited the decision to scrap the 1.5% final withholding tax as one of the incentives used to attract gold into the formal market.

According to Prof. Bokpin, the reported US$10.9 billion in foreign exchange inflows from GoldBod should not automatically be treated as profit because the programme incurred costs to acquire the gold.