By Daniel Bampoe
The ongoing engagement with the International Monetary Fund (IMF) has come under renewed parliamentary scrutiny, as Minority Members of Parliament raise serious concerns about the country’s gold management strategy, fiscal sustainability, and the broader implications of government policies tied to the ongoing IMF-supported programme.
Speaking on the floor of Parliament during deliberations on the proposed Gold Board legislation before Parliament’s recess, the Ranking Member on the Economy and Development Committee, Kojo Oppong Nkrumah, cautioned that government decisions surrounding gold trading and reserve accumulation could expose the country to significant financial risk.
His comments followed revelations by the IMF that Ghana had incurred an estimated loss of about US$214 million under existing arrangements, intensifying debate over the economic direction being pursued.
Oppong Nkrumah recalled that from the onset, the Minority had raised red flags about the government’s approach to reforming the gold sector, warning that the proposals lacked adequate consultation and risk assessment.
He stressed that gold remains the most important export commodity, accounting for nearly 57 per cent of total export earnings—valued at approximately US$11 billion in 2024—and therefore demanded a more cautious and inclusive policy framework.
According to him, the Minority had expected broader stakeholder engagement, including consultations with traditional authorities, industry players, and existing regulatory institutions, before Parliament was asked to pass sweeping legislation affecting the sector.
Instead, he argued, the government appeared determined to rush the process without adequately addressing long-standing structural concerns.
Central to the Minority’s objection is the government’s plan to establish a new Gold Board to oversee gold trading and exports.
Oppong Nkrumah questioned the necessity of creating an entirely new institution when existing bodies such as the Minerals Income Investment Fund (MIIF), the Precious Minerals Marketing Company (PMMC), the Minerals Commission and the Bank of Ghana already possess the legal mandate and institutional capacity to manage gold-related activities.
He warned that creating an additional state entity could deepen bureaucratic inefficiencies, encourage rent-seeking, and weaken accountability.
Drawing parallels with past experiences, he cited the transformation of the PMMC under PNDC Law 219 into a limited liability company following the Justice Crabbe Commission’s recommendations—arguing that Ghana should be strengthening, not duplicating, institutions.
Of particular concern to the Minority is the proposed structure of the new Gold Board, which they say would operate as a public corporation without clear commercial obligations.
According to Oppong Nkrumah, such a model risks becoming a financial burden on the state, similar to challenges faced by COCOBOD, which has been criticised for persistent financial inefficiencies despite heavy state support.
He further raised alarm over the government’s plan to inject up to US$250 million weekly into gold purchases to boost foreign exchange reserves.
Citing IMF concerns, he questioned whether the domestic economy has the capacity to absorb such liquidity injections without triggering inflationary pressures.
He noted that it was precisely these macroeconomic risks that had earlier compelled the IMF to advise the Bank of Ghana to halt its participation in the Gold-for-Oil programme.
Beyond macroeconomic risks, the Minority also warned of potential governance and accountability lapses.
Oppong Nkrumah pointed to the absence of clear traceability mechanisms in the proposed framework, cautioning that without strict oversight, increased gold financing could inadvertently fuel illegal mining and gold smuggling—problems that have long plagued the sector.
He stressed that traceability is critical not only for protecting the natural resources but also for maintaining international credibility, especially at a time when global markets and multilateral institutions are demanding higher transparency standards.
The Minority concluded by calling for more time to scrutinise the bill thoroughly, arguing that Parliament should not be rushed into passing legislation with far-reaching economic consequences.
They proposed a more measured approach that would allow for further stakeholder engagement, institutional reforms, and safeguards to ensure that the gold sector contributes sustainably to national development.
These parliamentary concerns come against the backdrop of ongoing negotiations with the International Monetary Fund, which recently proposed extending Ghana’s Extended Credit Facility programme to August 2026.
The IMF cited the need for additional time to complete key reforms, meet fiscal targets, and stabilise the economy following years of fiscal stress.
While the Fund has acknowledged progress in areas such as revenue mobilisation, debt restructuring and fiscal discipline, it has also emphasised the importance of transparency, prudent monetary policy, and effective governance—principles that lie at the heart of the Minority’s objections to the government’s current gold sector strategy.
