Economist Professor Godfred Alufar Bokpin says the GoldBod initiative has significantly reduced gold smuggling and helped Ghana retain more foreign exchange from the artisanal and small-scale mining sector.

According to him, the gap between Ghana’s gold export figures and those of importing countries has narrowed significantly since the introduction of GoldBod.

“Well, I think that there is no doubt that Gold Board has helped significantly in crowding in gold-related FX,” he told Joy News’ PM Express on Tuesday.

“You indicated in your introduction that the level of smuggling, in terms of whether you measure the difference between gold export data from Ghana and then importing countries, if you do the reconciliation, you can see that the gap has narrowed significantly with the introduction of the Gold Board.”

Prof Bokpin said the development was a major credit to GoldBod, noting that the problem of illegal mining, gold production and the failure to properly account for gold exports had already been recognised by Ghana’s two major political parties before the 2024 elections.

He said the NPP proposed reducing the final withholding tax on gold exports from artisanal and small-scale mining to encourage miners to declare their gold.

The NDC, he said, adopted a different approach by establishing GoldBod to operate more or less like COCOBOD, with responsibility for buying and exporting gold, particularly from artisanal and small-scale miners.

Prof Bokpin said GoldBod had subsequently helped bring into the formal financial system foreign exchange that previously left the country through gold smuggling.

“We can see the impact of Gold Board activities in terms of crowding in FX, foreign exchange that previously had been smuggled and didn’t ultimately end up in this country, probably ended up in private accounts outside this country whilst the cedi continually depreciates.”

However, he warned that the gains have come at a high cost to the country.

“That said, this whole domestic gold purchase arrangement for which Gold Board essentially became the face of it from 2025 has also come at a significant loss to us, has come at a significant loss.”

He attributed the losses partly to what he described as “design defects” in the programme.

“They were design defects of the program,” he said, arguing that better planning and expert input could have reduced the losses while preserving the benefits.

Prof Bokpin also cautioned against attributing macroeconomic stability entirely to GoldBod.

“If we talk about macroeconomic stability, in fact, that is not the job of the Gold Board,” he said.

He said macroeconomic stability is driven by fiscal and monetary policy, involving the Bank of Ghana and the Ministry of Finance.

He also pointed to the fiscal cost of abolishing the 1.5% withholding tax previously applicable to small-scale artisanal gold holders.

He said the government had to give up that revenue as part of efforts to bring more gold and foreign exchange into the formal system.

“If you look at the total gold exports from artisanal small-scale miners, which is more than $10 billion, and you want to do the analysis in terms of the fiscal losses, which could have gone to our revenue envelope, probably to fund roads, schools, and infrastructure, we have to give up that one also.”

Despite the costs, Prof Bokpin said the benefits of the intervention were substantial, particularly in terms of foreign exchange retention and macroeconomic stability.

“I recognise the impact of Gold Board, and I celebrate the progress that they have made in terms of crowding in gold-related FX, which ordinarily would have been smuggled or would have lost the FX and all of that.”

He, however, stressed that the costs must not be ignored.

“I think that if you look at the benefit in terms of the macroeconomic stability and all of that, I will say that the benefit is quite substantial, but we must also recognise the cost, the huge cost associated with implementing this intervention.”

Prof Bokpin said the government, GoldBod, and the Bank of Ghana have recognised that the losses are unsustainable.

He noted that, under the Bank of Ghana’s exit plan, the government intends to reduce the losses associated with the arrangement going forward.

“Government itself, together with the Gold Board and the Bank of Ghana, recognize that these losses are not sustainable going forward.”

He said the plan is to reduce the losses from about 17% or 14.5% to about 5% going forward.