IMF Sounds Alarm: Ghana's Gold Program Drains GH¢22BN from Public Coffers!

The Domestic Gold Purchase Programme (DGPP) in Ghana has become a subject of intense national debate following reports from the International Monetary Fund (IMF) detailing substantial financial losses. The IMF disclosed that the programme, designed to bolster Ghana’s foreign exchange reserves and stabilize the cedi, incurred losses exceeding US$1.7 billion (or GH¢22 billion) in 2025, a figure equivalent to approximately 1.5% of the country’s Gross Domestic Product (GDP). This significant loss intensified scrutiny and raised concerns about the Bank of Ghana’s (BoG) financial health, as it further deepened the central bank's negative equity position to 6.7% of GDP by the end of 2025.

These reported losses represent a sharp escalation from earlier estimates. Initially, the IMF had flagged a $214 million loss for the nine months ending September 2025, which the Bank of Ghana disputed at the time. However, as the central bank finalized its books for the year, the actual gross loss on doré gold trade with GoldBod ultimately reached the GH¢22 billion figure. The losses were attributed, in part, to the practice of purchasing gold at the more expensive forex-bureau exchange rate, contributing to 15.3% of gross gold purchase costs.

Despite the financial setbacks, the DGPP has found strong defenders. Attah Issah, Member of Parliament for Sagnarigu, argued that these losses were necessary "sacrifices" for restoring Ghana’s macroeconomic stability. He emphasized that the programme's success should not be judged solely on financial losses but on its broader economic impact, including the rebuilding of foreign exchange reserves, the strengthening of the cedi, and a significant reduction in inflation from highs of around 54% to approximately 5%. Mr. Issah maintained that the initiative aligned with the Bank of Ghana’s primary mandates of ensuring price stability and macroeconomic growth, and he defended the exchange rate incentives as deliberate policy measures aimed at curbing gold smuggling and channelling trade through official systems.

Conversely, Kojo Oppong Nkrumah, Ranking Member on Parliament's Economy Committee, has called for greater transparency from the Bank of Ghana regarding the full amount of monetary financing extended to the DGPP. He stressed the public's right to a complete financial picture, highlighting potential implications for the wider economy, including the BoG's liquidity sterilisation efforts. Mr. Oppong Nkrumah indicated that the Minority Caucus and the New Patriotic Party would continue to scrutinize the programme's financial data.

In response to the mounting losses and to safeguard the central bank's independence and credibility, the International Monetary Fund urged the Bank of Ghana to cease quasi-fiscal activities. As a corrective measure and prior action for completing Ghana's $3 billion Extended Credit Facility review, an agreement was signed in July 2026, formalizing the transfer of all DGPP activities from the Bank of Ghana to the state-owned Ghana Gold Board (GoldBod). Under this new arrangement, GoldBod, established in April 2025, will assume full responsibility for financing, purchasing, assaying, and exporting artisanal gold, as well as covering all operational costs. The government, from July 1, 2026, also took over 100% of the programme's costs, with GoldBod's expenditures to be reported transparently on the national budget. The IMF welcomed this transfer, noting it would eliminate future financial risks from the central bank’s balance sheet and enhance transparency, though it cautioned that state involvement in gold buying remains a fiscal risk requiring stringent cost containment.

The DGPP losses, combined with other factors like higher costs of open-market operations and exchange rate valuation losses, pushed the Bank of Ghana's equity position deeply into negative territory. A government cost-sharing agreement involving a GH¢5 billion bond transfer in March 2026 even breached a performance criterion under Ghana's IMF loan programme, necessitating a waiver. Looking ahead, the IMF has pressed for a credible plan to recapitalize the Bank of Ghana, whose balance sheet has been significantly weakened. Ghanaian authorities have committed to achieving full recapitalization by 2032, a step deemed critical for restoring the central bank's financial autonomy.

An independent external audit of the DGPP, covering the programme from its inception, is currently underway, with its findings anticipated in the third quarter of 2026. While gold remains a vital backbone for Ghana's external accounts, with artisanal and small-scale exports surging to $10.9 billion in 2025, the sector continues to face significant challenges including smuggling, near-zero fiscal revenue due to tax removals, and severe environmental degradation from illegal mining activities.