For many Ghanaians, the mention of GHS21.89 billion in connection with the Domestic Gold Purchase Programme naturally raises concern. At a time when households are still recovering from economic hardship, inflation, currency depreciation and high interest rates, any reference to a multibillion-cedi “loss” can understandably cause anxiety.
But economics cannot be understood through headlines alone.
To properly appreciate what has happened, we must ask: What exactly does the GHS21.89 billion represent?
Was that amount actually lost in cash? What did Ghana receive in return?
Why was gold purchased at market prices? And what has the programme contributed to the wider economy? The answers present a much more nuanced picture.
The challenge Ghana was trying to solve
Ghana’s economic vulnerabilities did not begin with the Domestic Gold Purchase Programme.
One longstanding challenge has been the country’s need for foreign exchange. Ghana imports fuel, machinery, pharmaceuticals, industrial inputs, vehicles and technology.
These imports require dollars and other foreign currencies.
When demand for foreign exchange persistently exceeds supply, pressure builds on the cedi.
A weaker cedi makes imports more expensive, and those costs eventually find their way into transportation, food, manufacturing and household expenditure.
This is why exchange-rate stability is not merely an issue for economists.
It directly affects the daily lives of Ghanaians.
Ghana therefore needs sustainable ways of building its foreign-exchange reserves.
This is where gold becomes strategically important.
Central banks across the world are rethinking reserve portfolios as geopolitical fragmentation raises concerns about the accessibility of foreign-held assets, while dollar-funding stress keeps the US dollar at the Centre of global financial stability
The country needs to follow what other peers are doing to de-dollarized and diversify its reserve base to mitigate any volatility linked to the instability of FX.
Turning Ghana’s gold into economic strength
The Domestic Gold Purchase Programme sought to purchase gold produced domestically, export it and convert the proceeds into foreign exchange that becomes part of Ghana’s reserves.
The programme generated US$13.8 billion in reserves, accumulated from domestic production rather than external borrowing.
That distinction matters.
Borrowing dollars gives a country foreign exchange today but creates a repayment obligation tomorrow.
Gold production, when properly captured within the formal economy, can provide a domestic source of foreign exchange.
In simple terms, Ghana is attempting to use what it produces at home to strengthen its reserves rather than continually relying on external borrowing.
So, what is the GHS21.89 billion?
This is perhaps the most misunderstood part of the debate.
The GHS21.89 billion is primarily an accounting adjustment, not a GHS21.89 billion cash outflow.
An accounting adjustment occurs when an asset is recognized in financial statements using a particular valuation, and differences arise because of changes or differences in the applicable exchange rates.
In this case, gold was purchased from miners in cedis at prevailing market prices but recorded in the Bank’s books at the official Bank of Ghana exchange rate in accordance with International Accounting Standard (IAS) 21.
Pricing close to the bureau rate is also consistent with Section 3(h) of the Ghana Gold Board Act, 2025 (Act 1140), which requires measures to discourage illegal gold trading.
Gold is acquired at the prevailing market rate because pricing below that level does not effectively reduce the cost to the State.
It displaces the gold out of the formal economy. The difference between those rates created an exchange rate adjustment.
The key point is simple: An accounting loss is not necessarily the same as a cash loss.
The gold was acquired, exported and sold to offtakers, with the resulting foreign exchange becoming part of Ghana’s reserves.
Indeed, after accounting for the Government’s GHS5 billion cost share and GHS7.9 billion in realised gains on gold bullion sales, the net cost recognised in the Bank’s accounts was GHS9.05 billion.
Therefore, GHS21.89 billion represents the gross programme cost, while GHS9.05 billion represents the Bank’s net share carried in its profit-and-loss account.
Why was the figure so large in 2025?
The framework was the same since the inception of the DGPP.
However, in 2025, two factors operated in the same direction.
1.The cedi appreciated by approximately 40.7 per cent during the year. Appreciation widens the divergence between the market acquisition rate and the official recording rate because the market takes time to adjust.
The stronger the cedi, the larger the resulting accounting adjustment. ( In cedi terms)
2.The programme approximately doubled in scale, from 56.47 tonnes in 2024 to 110.99 tonnes in 2025, with a value of US$11.4 billion.
A wider divergence applied to twice the volume produces a substantially larger figure.
Across 2024 the divergence averaged under 5 per cent. Across 2025 it averaged approximately 12 per cent, and considerably more during the second half of the year.
Why not simply buy the gold at the official exchange rate?
This is where economic reality becomes important. Gold producers operate in a competitive market. If a formal buyer offers significantly below the prevailing market price, the seller has another option: sell to informal buyers or smugglers.
Ghana has experienced this before.
Following the introduction of a 3 per cent withholding tax in 2021, official artisanal and small-scale gold exports fell from 39.3 tonnes to 3.4 tonnes, a 91 per cent decline in one year.
The evidence suggests that production did not simply disappear; rather, gold declarations into the formal system collapsed.
The lesson is clear: if Ghana tries to buy its own gold too cheaply, Ghana may simply lose the gold to informal channels.
That means losing the foreign exchange, taxes, traceability and reserve accumulation associated with formal transactions.
What did Ghana gain?
The gains are significant.
Formal artisanal and small-scale gold exports increased from 63.6 tonnes in 2024 to 103 tonnes in 2025. An independent assessment by economists from the University of Ghana and the University of Ghana Business School suggests that the additional 39.4 tonnes was plausibly gold previously lost to smuggling and subsequently captured within the formal framework.
At 2025 prices, this represented approximately US$3.54 billion in gold redirected from illegal traders into Ghana’s reserves.
That is why the debate should not stop at the accounting adjustment.
We should also ask: How much foreign exchange did Ghana gain? How much gold was brought into the formal economy?
How much smuggling was displaced? And how much reserve accumulation was achieved without external borrowing?
Those questions give us the fuller economic picture.
Why this matters for the cedi, inflation and interest rates
Stronger foreign-exchange reserves improve the Bank of Ghana’s ability to manage periods of pressure on the cedi.
A more stable cedi can reduce imported inflationary pressures.
Lower inflation improves household purchasing power and gives businesses greater certainty in planning. Lower inflation also creates room for interest rates to decline over time.
This matters enormously.
High interest rates make borrowing expensive, discourage business expansion and constrain investment.
Lower interest rates, when supported by sustainable disinflation and macroeconomic stability, can make credit more accessible and create better conditions for businesses to invest, expand and create jobs.
Therefore, a stable exchange rate, lower inflation and declining interest rates are not isolated statistics.
Together, they establish the foundation upon which sustainable economic growth can be built.
The Bank of Ghana’s responsibility is not simply to “keep the dollar rate down.”
Its broader mandate is to help create the monetary and financial conditions necessary for stability, confidence and sustainable growth.
The weaknesses are being addressed
The above gains achieved does not mean the programme was perfect.
It means recognising both its achievements and the reforms being undertaken to address its weaknesses.
Transaction charges reportedly fell from approximately 17 per cent of transaction value before 2025 to 7.25 per cent by February 2026, and subsequently to 5 per cent effective August 1, 2026, with the latter borne by the Ministry of Finance and allocated in the budget.
The Bank also moved towards multiple approved offtakers, increasing competition and improving commercial terms.
The GoldBod service fee was reduced from 0.50 per cent before 2025 to 0.40 per cent in 2025 and subsequently to 0.10 per cent.
More importantly, from July 1, 2026, GoldBod introduced a benchmark pricing framework using the international LBMA AM and PM prices.
This is intended to reduce reliance on informal market quotations, improve transparency and ultimately narrow the exchange-rate gap that generated much of the accounting adjustment.
The way forward
Ghana should not respond to the GHS21.89 billion figure by abandoning the programme.
The answer is to make the programme better.
We must continue reducing transaction costs, strengthen transparent benchmark pricing, maintain competition among offtakers, improve disclosure around programme revenues and costs, and intensify the fight against gold smuggling.
Most importantly, Ghana must ensure that the foreign-exchange reserves generated through such programmes contribute to broader macroeconomic stability and, ultimately, improved living standards.
The GHS21.89 billion debate should therefore become an opportunity for economic education, not merely political confrontation. Ghanaians deserve accountability and transparency.
But they also deserve the complete story.
Economic recovery is not built by one policy or one institution.
It is built by fixing vulnerabilities one after another: strengthen reserves, stabilize the currency, reduce inflation, lower the cost of credit, restore confidence, encourage investment, expand production and create jobs.
The Bank of Ghana should never be above scrutiny. But it should also not be judged through a single headline number stripped of its economic context.
The real question is whether Ghana is becoming more financially resilient, better able to generate its own foreign exchange, more stable in its currency, less vulnerable to external shocks and better positioned for sustainable growth.
That is the bigger story, and on that journey, the work of the Bank of Ghana matters.
The task now is to consolidate the gains, correct the weaknesses and keep moving forward.
The Bank of Ghana deserves fair hearing and commendation for a program that raked in well over US$13b.The full and honest disclosure by BoG regarding the DGPP also needs to be commended
By Nelson Cudjoe Kuagbedzi
(BSc, MPhil, MBA, GSE, CA, MCIT, ACIB, ACI, MIoD)
Finance and Tax Analyst
Cknellynelson@gmail.com
