IMF Directs Bank of Ghana to End Gold Purchase Operations Following GH¢22 Billion Loss and Negative Equity Risks

The International Monetary Fund (IMF) has strongly advised the Bank of Ghana (BoG) to discontinue its quasi-fiscal operations, specifically the Domestic Gold Purchase Programme (DGPP), following a substantial loss of GH¢22 billion (approximately $1.7 billion) in 2025. This loss represented about 1.5% of the nation's Gross Domestic Product (GDP) and contributed to a negative equity position for the central bank reaching 6.7% of GDP by the end of that year. While the programme was initially designed to bolster foreign exchange reserves and stabilize the Cedi amidst economic recovery, the resulting financial strain has raised serious concerns regarding the BoG's financial health, credibility, and operational independence.

In response to these fiscal challenges and IMF recommendations, the government has transitioned the DGPP operations from the central bank to the Ghana Gold Board, commonly referred to as GoldBod. This strategic move, which followed an agreement reached in July 2026, aims to improve accountability and mitigate the financial risks previously absorbed by the BoG. By shifting gold purchasing and related costs to GoldBod, the BoG is expected to refocus its mandate on its primary objective of maintaining price stability. The IMF has welcomed this transfer as a critical step toward enhancing transparency, though it continues to advocate for a comprehensive recapitalization of the central bank to restore market confidence and ensure long-term macroeconomic stability.

Despite the structural shift, critics such as Bright Simons, Vice President of IMANI Africa, have voiced concerns regarding the long-term sustainability of the GoldBod model. Simons highlighted that the program imposes high structural costs on the economy, noting an average margin of 17 cents per dollar through these transactions, excluding the costs of sterilization. Analysts suggest that the program's perceived benefits may be more reflective of historically high global gold prices rather than the efficiency of the initiative itself. Furthermore, the IMF has warned of Ghana's increasing vulnerability due to its heavy reliance on gold, which accounted for over 68% of total export earnings as of July 2026. A hypothetical 45% drop in global gold prices could decrease revenues by 1.5% of GDP and severely weaken public finances.

As the administration of President John Mahama moves forward with its economic recovery plan, the focus remains on balancing resource-backed stability with fiscal discipline. An independent audit of the Domestic Gold Purchase Programme is currently in progress, with results expected later this year to provide a clearer picture of the program's impact. Additionally, Finance Minister Dr. Forson has emphasized a three-year diversification strategy aimed at strengthening sectors like agriculture to reduce the nation's exposure to gold price volatility. These measures will be vital in ensuring that Ghana’s financial institutions remain resilient while the country navigates its path toward sustainable economic growth.