The pricing framework adopted by GoldBod and the Bank of Ghana has been defended in a new economic report as a deliberate policy tool aimed at curbing gold smuggling and strengthening macroeconomic stability, rather than generating profits.

The report stresses that assessing the Gold-for-Reserves (G4R) programme on the basis of accounting profit or loss fundamentally misunderstands its objectives.

According to the authors, GoldBod’s decision to purchase gold at world spot prices was informed by Ghana’s past experience, where even small pricing discounts pushed large volumes of gold into informal and cross-border channels.

“Buying below spot creates a guaranteed arbitrage rent for smugglers,” the report explains, warning that any artificial price wedge undermines formalisation efforts.

The economists argue that Ghana’s ASM gold market operates as an arbitrage environment, where miners choose between official and informal buyers based on net returns.

“When the expected payoff from smuggling exceeds that of the official channel, rational miners will exit the formal system,” the report states, adding that GoldBod’s pricing strategy is designed specifically to collapse this wedge.

While the strategy carries an estimated policy cost of about 2.5 per cent of gold value—reflecting statutory fees, offtake discounts and handling losses—the report insists these should be viewed as intentional compliance costs.

“These are not inefficiencies or operational failures, but the explicit price paid to internalise gold flows that would otherwise be lost,” the authors emphasise.

The report further explains that reported losses under the G4R programme are largely accounting effects arising from exchange-rate valuation rules, not actual cash losses.

“The appropriate benchmark is whether macroeconomic benefits exceed policy costs,” the study concludes, arguing that stronger reserves, exchange-rate stability and reduced inflation far outweigh the visible accounting charges.