BY GRACE ZIGAH
The International Monetary Fund (IMF) has raised fresh concerns about the gold management strategy, revealing that the country’s ambitious Domestic Gold Purchase Programme (DGPP), despite helping to stabilise the cedi and strengthen foreign exchange reserves, generated an estimated US$1.7 billion financial loss—equivalent to about 1.5 per cent of Ghana’s Gross Domestic Product (GDP)—leaving significant fiscal risks now transferred to the newly established Ghana Gold Board (GoldBod).
The disclosure, contained in the IMF’s latest assessment of Ghana’s economy following the successful completion of the country’s Extended Credit Facility (ECF) programme, shifts attention from the government’s celebrated macroeconomic recovery to deeper structural weaknesses that continue to threaten the sustainability of the country’s economic gains.
While the IMF commended Ghana for restoring macroeconomic stability through declining inflation, stronger fiscal discipline, improved external balances and a more stable exchange rate, it cautioned that stabilisation alone does not amount to genuine economic transformation.
Instead, the Fund warned that the economic recovery remains vulnerable because it is increasingly dependent on exceptionally high international gold prices rather than broad-based economic diversification.
According to the IMF, gold now accounts for more than half of the total exports, making the country’s external sector increasingly susceptible to fluctuations in global commodity prices.
The report argues that although Ghana remains Africa’s largest gold producer, the country is still failing to maximise the full economic value of its mineral wealth.
It noted that fiscal revenues generated from the mining sector remain relatively modest compared to the scale of production, while weaknesses in transparency and fiscal reporting continue to limit public accountability over mineral revenues.
However, one of the report’s most significant revelations concerns the financial impact of the Domestic Gold Purchase Programme introduced by the Bank of Ghana.
The programme, launched to increase the country’s gold reserves and strengthen foreign exchange buffers, enabled the central bank to purchase locally produced gold in exchange for cedis before exporting part of the bullion to generate foreign currency.
The IMF acknowledged that the programme contributed significantly to rebuilding Ghana’s international reserves and helped support exchange-rate stability during a period of severe economic distress.
Nevertheless, the Fund concluded that the operation came at a substantial financial cost.
According to the IMF, the programme accumulated losses estimated at approximately US$1.7 billion, largely arising from assay charges, transaction fees paid to GoldBod, discounts granted on gold sold to international off-takers and other operational costs associated with the gold purchasing arrangement.
These losses, the report stated, significantly weakened the balance sheet of the Bank of Ghana, which is already carrying substantial negative equity following the Domestic Debt Exchange Programme and other quasi-fiscal interventions undertaken during Ghana’s economic crisis.
In what analysts describe as one of the report’s most consequential observations, the IMF disclosed that responsibility for these accumulated losses has now been transferred to the Ghana Gold Board for onward absorption by the Government of Ghana, effective July 2026.
The transfer is expected to remove the financial burden from the central bank’s books, but it simultaneously raises new questions about how government intends to finance, account for and manage these liabilities going forward.
The IMF stressed that while rebuilding foreign exchange reserves remains an important macroeconomic objective, accumulating reserves significantly above internationally accepted adequacy levels carries considerable opportunity costs.
According to the Fund, resources devoted to excessive reserve accumulation could otherwise finance productive investments capable of generating employment, expanding industrial output and supporting long-term economic growth.
Beyond the financial implications of the gold programme, the IMF also expressed concern over the continued struggle with illegal mining, popularly known as galamsey.
The report estimates that billions of dollars worth of gold continue to leave the country through smuggling networks, depriving the state of tax revenues, export earnings and valuable foreign exchange.
The Fund warned that illegal mining has evolved beyond an environmental problem into a major macroeconomic risk because of its destructive impact on agricultural land, cocoa production and water resources.
The IMF also identified persistent weaknesses within Ghana’s energy sector as another major fiscal threat capable of undermining the country’s economic recovery if comprehensive reforms are not implemented.
Despite recognising the progress achieved under the IMF-supported programme, the Fund concluded that the next challenge is no longer restoring macroeconomic stability but transforming that stability into sustainable and inclusive economic growth.
According to the report, long-term prosperity will depend on economic diversification, stronger public institutions, improved governance, enhanced domestic revenue mobilisation, productive investments and policies capable of raising productivity and creating quality jobs.
The IMF emphasised that while stable inflation, improved fiscal balances and stronger foreign reserves provide an essential foundation, they are not substitutes for genuine development.
