The Chamber of Licensed Gold Buyers (CLGB) is calling for the Bank of Ghana (BoG) to be protected from the long-term commercial risks associated with gold trading, amid growing debate over reported losses of about US$1.7 billion under Ghana’s gold purchasing programme.

The Chamber says the reported figure should not, on its own, be interpreted as proof that Ghana’s strategy of using gold to strengthen its reserves has failed.

Instead, it wants the financial costs of the programme assessed alongside its broader macroeconomic benefits, including foreign exchange accumulation, reserve building, cedi stability and the formalisation of Ghana’s artisanal and small-scale mining (ASM) gold sector.

In a statement signed by its Secretariat, the CLGB said the reported US$1.7 billion primarily relates to the Bank of Ghana’s gold purchasing and reserve operations and should not automatically be classified as a loss incurred by the Ghana Gold Board (GoldBod).

The Chamber is therefore proposing an independent reconciliation involving the BoG, the International Monetary Fund (IMF) and GoldBod to establish precisely what the reported figure represents.

It wants the exercise to distinguish between actual trading losses, transaction costs, fees and valuation effects, while also assessing the wider economic benefits generated by the gold purchasing programme.

The CLGB argues that such an assessment is necessary to provide a clearer picture of the programme’s overall cost and value to the economy.

The Chamber says the controversy has exposed a broader concern with the institutional structure of Ghana’s gold strategy.

It believes the BoG should concentrate on monetary stability, foreign exchange management and reserve management, while GoldBod should assume responsibility for the commercial aspects of gold procurement, aggregation, pricing, logistics, refining and trading.

“The question should therefore not be: ‘Should Ghana abandon GoldBod?’” the Chamber said.

“It should be: ‘How do we preserve the strategic benefits of Ghana’s gold strategy without transferring excessive commercial and operational risk onto the central bank’s balance sheet?’”

The CLGB believes the transition towards GoldBod taking greater responsibility for gold purchases provides an opportunity to determine whether Ghana can achieve similar macroeconomic benefits at a lower transaction cost.

Despite its concerns about the existing arrangement, the Chamber has defended the broader strategy of using Ghana’s gold resources to strengthen foreign exchange reserves and formalise the ASM sector.

It says an assessment of the programme should consider not only its financial costs but also the value of reserves accumulated, foreign exchange liquidity provided to the economy, reduced pressure on the cedi and avoided import-financing constraints.

It also believes the strategy could help reduce leakage from informal gold trading.

The CLGB maintains that the two issues can coexist — the programme may have delivered significant macroeconomic benefits while also imposing substantial financial costs.

It therefore cautions against either dismissing the US$1.7 billion figure or presenting it as conclusive evidence that Ghana’s gold-reserve strategy was economically irrational.

To address the concerns, the Chamber has outlined a five-point policy framework.

It wants:

• An independent reconciliation of the reported US$1.7 billion involving the BoG, IMF and GoldBod.
• The BoG’s balance sheet to be protected from long-term commercial gold-trading risks.
• GoldBod to be held commercially accountable through transparent procurement margins, transaction costs, pricing methodologies, off-taker arrangements and audited financial statements.
• Ghana to introduce a measurable “cost of reserve accumulation” framework to determine the cost of acquiring additional reserves through gold compared with other mechanisms.
• A shift from simply maximising the volume of gold purchased to maximising the value Ghana derives from its gold resources.

According to the CLGB, the final objective should involve reducing smuggling, leakage, transaction costs and unnecessary intermediaries while increasing the value retained within the formal gold supply chain.

The Chamber says its position is neither “pro-IMF” nor “pro-GoldBod”, but is instead focused on economic efficiency, institutional accountability and national value creation.

It is proposing a clearer division of responsibilities in which GoldBod regulates and aggregates gold, the BoG manages monetary and reserve policy, government sets the broader policy framework, and private-sector operators provide competitive market capacity.

The CLGB also wants independent audits to ultimately establish whether the arrangement delivers value for money.

It says Ghana’s objective should be to move its gold policy away from an emergency macroeconomic intervention towards “gold as a professionally governed national economic asset.”

The Chamber’s position comes amid heightened political and public scrutiny of the reported US$1.7 billion associated with Ghana’s gold purchasing and reserve accumulation programme, with calls growing for greater clarity on the financial costs and benefits of the strategy.