Ghana’s attempt to turn its gold resources into a strategic source of foreign exchange has delivered both significant macroeconomic benefits and substantial financial costs, raising questions about how the country can make the program more efficient and sustainable.

Economic policy analyst Senyo Hosi has argued that the Domestic Gold Purchase Programm was fundamentally designed to address Ghana’s foreign-exchange challenges and maximize the country’s ability to generate forex from its gold resources.

In his view, the losses should therefore not be examined purely as accounting losses; policymakers must also look at the economic objective the program was designed to achieve.

However, he argues that if Ghana wants domestic aggregators to participate effectively and reduce gold smuggling and reduce losses, the economic incentives must be properly aligned.

A major issue is the gap between the Bank of Ghana's official exchange rate and the rate available on the parallel or black market. If the official rate used to price locally purchased gold is significantly less attractive than what traders can obtain elsewhere, gold can naturally gravitate towards alternative channels, including smuggling.

This creates a fundamental policy problem: Ghana can enforce the law against gold smuggling, but enforcement alone may not be enough if the economics continue to make smuggling attractive.

The losses in figures

Available Bank of Ghana figures show that the combined Domestic Gold Purchase Programme, Gold-for-Oil and Gold-for-Reserves operations recorded substantial losses between 2022 and 2025.

The 2022–2024 figures were disclosed by the Bank in response to an RTI request, while the 2025 figures are contained in the Bank’s audited financial statements.

The Gold-for-Oil programme alone accumulated losses of about GH¢2.14 billion between 2023 and 2024, before it was discontinued in March 2025. The 2025 financial statements show a further GH¢203 million net loss associated with G4O activities during the year.

The much larger 2025 figure came from Gold-for-Reserves, which recorded a net loss of approximately GH¢8.85 billion. The BoG explains that the G4R programme involved buying doré gold for foreign-exchange generation and reserve accumulation, with the financial result reflecting the difference between acquisition costs and realised proceeds, together with related costs and gains.

But the question is not simply: “How much did Ghana lose?”

The bigger economic question is what did Ghana get in return for those costs?

The original Domestic Gold Purchase Programme was launched in 2021 to buy domestically produced gold and convert it into monetary gold and foreign assets, thereby strengthening Ghana's reserves. The Gold-for-Oil initiative was subsequently introduced to reduce the country's dependence on dollars for petroleum imports.

That strategy helped channel significant quantities of Ghanaian gold into the formal financial system. It also provided an alternative source of foreign exchange at a time when Ghana was experiencing severe dollar shortages.

But the scale of the reported losses means the model cannot simply continue without addressing its operational weaknesses.

The aggregator and smuggling problem

This is where the argument about incentives becomes important.

Ghana has a large artisanal and small-scale gold-mining sector. If licensed aggregators are expected to purchase gold and ensure that it enters the formal system, they must be able to operate at a price and exchange rate that is commercially competitive.

The government itself has acknowledged that Ghana's previous fragmented gold-buying structure contributed to smuggling and deprived the country of foreign exchange. The Finance Ministry said in 2025 that approximately 60 tonnes of gold, valued at about US$1.2 billion, were smuggled out of Ghana in 2022 alone.

That means Ghana faces two connected challenges:

First, enforcement: the state must prevent illegally produced or illegally exported gold from leaving the country.

Second, incentives: the official gold-buying system must offer sufficiently competitive prices and foreign-exchange arrangements to make legal trading more attractive than informal channels.

If an aggregator can obtain a materially better return outside the official system, simply telling the aggregator to comply may not solve the problem.

The exchange-rate question

The exchange-rate differential is therefore central.

If gold is purchased using a cedi-dollar rate that does not reflect prevailing market conditions, the official buyer can end up paying a price that is either unattractive to miners and aggregators or expensive for the state.

Senyo Hosi's argument is essentially that Ghana must solve the economic problem alongside the enforcement problem.

The state needs to ask:

What exchange rate and pricing mechanism will make it commercially rational for miners and aggregators to sell their gold through the official channel?

At the same time, the state must ensure that the system does not simply transfer losses from private traders to the Bank of Ghana.

A new model is emerging

The establishment of the Ghana Gold Board (GoldBod) was intended to address some of these structural weaknesses by creating a more coordinated framework for the purchase, assaying, marketing and export of gold from the small-scale mining sector.

The Finance Ministry has described GoldBod as a mechanism to formalise gold trading, improve traceability, reduce smuggling and increase foreign-exchange accumulation.

The early results have been significant. In its first full month of operations in 2025, GoldBod reportedly generated more than US$1.1 billion in foreign exchange from over 11 tonnes of gold exports.

But the lesson from the earlier programmes is that scale alone is not enough.

Ghana needs a gold-buying system in which the price paid to producers, the exchange rate applied, aggregator margins, export discounts, operational costs and the eventual foreign-exchange proceeds are transparent and commercially sustainable.

The business lesson

Ghana's gold strategy therefore presents a difficult balancing act.

The country wants to maximise foreign exchange from its largest export commodity. It wants to build reserves. It wants to stabilise the cedi. It wants to reduce gold smuggling. And it wants to bring artisanal and small-scale gold production into the formal economy.

But all of those objectives come at a cost.

The combined reported losses from the G4O and G4R programmes reached approximately GH¢16.16 billion between 2022 and 2025, based on the figures above.

The challenge now is to ensure that Ghana does not merely buy more gold but buys it through a system that is efficient enough to convert the country's mineral wealth into sustainable foreign-exchange gains.

For Senyo Hosi, that means confronting the economics of the market: make the official channel competitive, close the gap between official and parallel-market incentives, and enforce the law against smuggling.

The ultimate test of Ghana's gold policy will not simply be how many tonnes of gold the state buys.

It will be how many dollars Ghana retains from those tonnes after all costs and losses have been accounted for.