Economist Proposes Four Governance Rules to Strengthen Ghana Gold Programme

Tue Dec 30 2025

Economist and political risk analyst Dr. Theo Acheampong has outlined a comprehensive framework to protect Ghana’s Domestic Gold Purchase Programme (DGPP), enhance transparency, and ensure it effectively supports the cedi and broader economy.

The recommendations follow his recent econometric analysis concluding that Ghana’s gold reserve accumulation is driven by policy rather than opportunistic responses to price fluctuations.

Dr. Acheampong, who serves as Technical Advisor at the Ministry of Finance and Vice President of policy think tank ImaniAfrica, argues that without clear operational rules, even well intended policies can lose public trust and create economic risks. His four point framework addresses systematic purchase protocols, liquidity management, foreign exchange sales transparency, and governance structures.

The economist emphasizes that Ghana should follow clear purchase rules by buying gold steadily over time instead of rushing to acquire more whenever global prices rise. This calm and predictable approach avoids panic decisions and protects the Bank of Ghana (BoG) from price shocks. Steady accumulation represents critical infrastructure for making the programme effective rather than reactive to market volatility.

Dr. Acheampong’s econometric research using nearly three years of official BoG data demonstrated that while gold prices and Ghana’s reserves show strong correlation over time at 0.92, this relationship proves misleading. When examining month to month movements, correlation becomes negative at minus 0.38, showing that during months with rising prices, reserve increases tend to be smaller. After removing linear time trends, correlation drops sharply to minus 0.64, confirming that price spikes do not coincide with extra accumulation.

The second recommendation addresses liquidity management, recognizing that buying gold injects cedis into the economy. Dr. Acheampong stresses the need for clear liquidity rules deciding when and how excess cedis are removed from circulation. Without proper management, inflation could rise and weaken household purchasing power, undermining the programme’s stabilization objectives.

The economist calls for transparent sterilization protocols that account for inflation targeting frameworks. The Bank of Ghana must coordinate closely with the Ministry of Finance to ensure gold purchases do not inadvertently flood the money supply, creating inflationary pressures that offset foreign exchange benefits. Clear liquidity rules provide predictability for monetary policy implementation while maintaining programme credibility.

Third, Dr. Acheampong advocates for transparent foreign exchange sales rules so Ghanaians and investors clearly understand how gold reserves are used to supply dollars to the market. When foreign exchange sales are rule based and predictable, businesses can plan better, investors gain confidence, and the cedi becomes less volatile. Transparent and market neutral mechanisms prevent accusations of favoritism or discretionary allocation benefiting connected parties.

The International Monetary Fund (IMF) disclosed in its fifth review report released December 17 that the BoG, working with the Ministry of Finance and other state institutions, has adopted a new Foreign Exchange Operations Framework to improve transparency, limit discretion, and reduce market distortions associated with large DGPP related inflows. This development aligns with Dr. Acheampong’s recommendation for systematic rather than ad hoc foreign exchange interventions.

The fourth pillar involves protecting the programme through strong governance including independent audits, transparent selection of gold aggregators and assayers, and strict tracking of gold sourcing. This helps prevent corruption, protects the environment, and reassures citizens that Ghana’s gold is not being misused or smuggled through weak oversight.

Environmental concerns have intensified following Parliamentary Minority allegations that GoldBod purchases gold from illegal mining operations without adequate sourcing verification. Dr. Acheampong emphasized in September 2025 that ensuring GoldBod does not purchase galamsey gold remains critical, noting that gold exports contributed 11.2 billion dollars of Ghana’s 18 billion dollars total exports between January and August 2025, representing 62 to 63 percent of all exports.

The economist highlighted that roughly 70 percent of all small scale mining activities operate without proper licensing, creating significant risks that illegally sourced gold enters official channels. Robust governance structures including Organisation for Economic Co-operation and Development (OECD) due diligence standards and Financial Action Task Force (FATF) anti money laundering protocols become essential for maintaining programme legitimacy.

Dr. Acheampong’s recommendations address criticisms that have emerged following IMF disclosure that DGPP operations incurred losses of approximately 214 million dollars during the first nine months of 2025. The Fund attributed losses primarily to trading margins and off taker fees, underscoring the need for tighter cost and risk controls.

The economist previously explained that from inception, the DGPP design made operational losses almost inevitable because GoldBod purchased gold at zero percent discount, meaning full market price with no margin covering costs. Transport expenses, employee wages, utility bills, and operational overheads all register as losses under this zero margin approach. However, he argued these operational costs represent less than three percent of foreign exchange income generated, suggesting the programme delivered substantial positive returns when viewed comprehensively.

GoldBod Chief Executive Officer Sammy Gyamfi stated the Board exceeded its 2025 small scale gold export target of 100 tonnes, generating over 10 billion dollars in foreign exchange for Ghana. Both GoldBod and BoG have contested the IMF’s loss characterization, arguing that claiming profitability while the central bank absorbs exchange rate losses obscures the programme’s true financial impact.

The IMF recognized DGPP as a key stabilization tool that materially supported reserve accumulation and exchange rate stability during acute macroeconomic stress. The Fund noted that rapid scaling up of domestic gold purchases, especially in 2025 from the artisanal and small scale mining sector, enabled Ghana to meet medium term reserve adequacy targets ahead of schedule, strengthening credit, external buffers, and restoring market confidence.

Gold reserves have surged nearly 39 percent over the past year, climbing from 25.97 tonnes in August 2024 to 36.02 tonnes by August 2025, valued at 3.17 billion dollars. The cedi appreciated more than 50 percent against major trading currencies between January and May 2025, trading at 11.85 cedis to the US dollar by May, representing the first time the cedi has appreciated since 2007.

Dr. Acheampong previously warned that cedi gains could prove temporary without disciplined policy action, emphasizing structural economic reforms beyond reserve accumulation. His current recommendations provide specific operational frameworks to institutionalize the discipline he argues determines whether gains prove sustainable or ephemeral.

The economist serves as non resident fellow at various think tanks including Ghana’s ImaniAfrica and the Aberdeen Centre for Research in Energy Economics and Finance (ACREEF), Scotland. He is also a visiting fellow at the European Council on Foreign Relations (ECFR), where he works on how the energy transition, natural resource governance, and global value chains affect Africa.

Parliamentary opposition has raised serious concerns over gold aggregation arrangements, alleging that a single private company, Bawa Rock Limited owned by Alhaji Rashid Bawa Namoro, has exclusively purchased gold worth more than 10 billion dollars on behalf of GoldBod and BoG over the past nine months. The Minority argues this situation raises troubling questions about transparency, competition, and governance that Dr. Acheampong’s governance recommendations directly address.

Policy analyst Dr. Emmanuel Steve Asare Manteaw has defended losses reported under gold backed programmes, arguing that economic policy must be judged by macroeconomic outcomes rather than isolated financial figures. He characterized criticism of GoldBod as politically motivated attacks rather than substantive institutional assessment, noting that benefits from GoldBod activities currently outweigh operational losses.

Dr. Acheampong’s framework attempts to bridge this debate by accepting that operational costs may be justified while insisting on systematic rules preventing those costs from spiraling beyond reasonable bounds. His recommendations acknowledge both the programme’s macroeconomic value and the legitimate concerns about operational efficiency, transparency, and environmental protection.

The IMF signaled overall support for retaining stabilization benefits while recommending operational reforms to minimize losses and ensure long term macroeconomic and institutional sustainability. Dr. Acheampong’s four pillars provide specific implementation pathways for the reforms the Fund advocates without dismantling the programme’s core stabilization function.

Taken together, Dr. Acheampong believes these measures would help Ghana run a gold programme that is stable, transparent, and trusted. Such discipline is essential if gold is to remain a reliable anchor for reserves, foreign exchange support, and long term economic confidence. Without systematic rules governing purchases, liquidity management, foreign exchange sales, and governance, even a programme delivering macroeconomic benefits risks losing public legitimacy.

The coming months will test whether policymakers implement these recommendations or continue operating under more discretionary arrangements. As Ghana works toward completing its IMF programme by August 2026, demonstrating that DGPP operates under transparent, rule based frameworks could strengthen confidence in the country’s broader economic management.

Dr. Acheampong’s intervention provides technical content to debates that have often been conducted through political rather than analytical lenses. His econometric work establishing that purchases follow policy rather than prices, combined with these operational recommendations, offers a path toward maintaining DGPP benefits while addressing legitimate governance concerns.

Source: https://www.newsghana.com.gh/