When Ghana’s foreign exchange buffers thinned and confidence in the economy wavered, the Bank of Ghana turned to gold.

Appearing before Parliament’s Public Accounts Committee on Monday, January 12, Governor Dr Johnson Pandit Asiama said the Domestic Gold Purchase Programme was introduced in 2021 at a moment of acute vulnerability, when reserves were precariously low, and stability was under threat.

He said the objective was clear. Strengthen reserves. Stabilise the currency. Create space for recovery by leveraging Ghana’s natural endowment.

Judged by that purpose, the Governor said the programme delivered.

Since its introduction, the strategy has mobilised more than $17 billion in gold value. In 2025 alone, about 100 tonnes of gold were supplied, generating close to $10 billion in foreign exchange proceeds.

The Governor told the committee the inflows strengthened reserves, improved market liquidity and reduced exchange-rate pass-through to inflation.

But he was quick to add that the stability achieved was not free.

“But frankly, this stability came at a cost,” he said.

Dr Asiama explained that the Bank deliberately carried the financial burden of a national strategic policy in the national interest. He stressed that the programme was not designed to make trading profits.

“The programme was never conceived as a speculative trading operation, but as a stabilisation tool designed to protect the wider economy,” he said.

The Domestic Gold Purchase Programme was built around three channels. Refined gold from large mining firms. Dore gold from local aggregators. And dore gold from artisanal and small-scale miners, exported and converted into foreign exchange.

Over time, the programme shifted decisively toward artisanal gold. Volumes rose from less than one tonne in 2022 to over 100 tonnes in 2025.

That expansion, the Governor said, played a major role in sustaining foreign exchange inflows during a period of market stress.

Questions have been raised about losses recorded in the early years of the programme. Dr Asiama said those losses were driven mainly by timing and foreign exchange conversion effects, as well as structural costs in dore gold transactions.

He rejected claims that the Bank was buying high and selling low.

“To be clear, the narrative that the Bank ‘buys gold at high prices and sells at low prices’ is incorrect,” he said.

According to him, transactions were conducted at prevailing market prices, with outcomes shaped by timing, settlement structures and the stabilisation mandate under which the programme operated.

The Governor said major improvements were introduced in 2025. Transaction costs were reduced. Settlement risks were lowered. Coordination across the value chain was strengthened through the creation of GoldBod.

He said offtaker discounts, agent fees and assay charges were cut, bringing total charges down significantly.

Several risk controls were also introduced. Gold shipments were made conditional on full payment or bank guarantees. Proceeds were ring-fenced. The Gold FX Auction mechanism was strengthened.

Looking ahead, the Governor said further reforms are planned. These include structured hedging, more cost reductions and a gradual withdrawal of direct Bank of Ghana funding, with GoldBod taking on greater responsibility.

Dr Asiama also addressed concerns raised by the IMF regarding multiple-currency practices. He said the issue predates 2025 and is not due to recent reforms.

“Working closely with the IMF, the Bank of Ghana in 2025 introduced a new FX auction framework to address these long-standing structural issues,” he said.

He insisted the reforms focus on transparency, predictability and market-based price discovery.

In his closing remarks, the Governor warned against turning the programme into a partisan debate.

“The Domestic Gold Purchase Programme did not begin in 2025, nor has it been abandoned,” he said.

He said what has happened is a continuation of a national policy, refined as conditions evolved and strengthened in partnership with the IMF.