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GoldBod Will Have to Be Mounted, Not Scrapped – Economist

Date: December 30, 2025 | Category: Economic Policy / Ghana Business News

Introduction

In the wake of reports detailing a significant financial deficit within Ghana’s gold purchasing program, a heated debate has erupted regarding the future of the initiative. The controversy centers on a reported $214 million loss incurred by the Gold Board (GoldBod) within a nine-month period. While political opponents and some members of the public have called for the immediate termination of the program, a leading economist is urging caution and structural intervention instead.

Professor Patrick Asuming, a respected voice in economic policy analysis, posits that the reported losses should not be viewed as a failure of the concept itself, but rather as a symptom of specific operational choices. In a detailed interview on Joy FM’s Midday News, he argued that the “GoldBod” program is a vital asset for the national economy, provided that the mechanisms governing it are mounted and optimized. This article explores the background of the controversy, analyzes the economist’s perspective on the “cost of reserves,” and offers practical insights into the future of Ghana’s gold management strategies.

Key Points

The Loss is Real, But Contextual: Professor Asuming acknowledges the $214 million deficit but suggests it stems from deliberate policy choices intended to curb gold smuggling, rather than mismanagement alone.
Reform Over Removal: The primary recommendation is to “mount” or fix the current system. Scrapping the program entirely would strip the country of vital foreign exchange reserves.
The Cost of Reserves: Accumulating strategic gold reserves incurs a cost. The debate should focus on minimizing this cost and determining which institution should bear the financial burden.
Political Polarization: The issue has become a flashpoint between the Minority and Majority caucuses in Parliament, complicating objective policy review.
Smuggling Deterrence: Part of the financial loss is attributed to the strategy of paying higher prices to local miners to prevent gold from leaving the country illegally.

Background

The controversy surrounding the Gold Board (GoldBod) began circulating widely in late December 2025. Reports indicated that the state-owned entity recorded a massive loss of $214 million in gold trading activities within the first nine months of the year. This news broke at a time when global gold prices were hitting historical highs, leading many to question how a state program could lose money during a bull market.

The Political Divide

The revelation immediately triggered a political standoff. The Minority Caucus in Parliament seized on the figures, insisting that the losses are evidence of gross incompetence and corruption within the current administration. They argued that such a deficit is indefensible and serves as grounds for the program’s cancellation.

Conversely, the Majority Caucus, represented by Eric Afful, Chairman of Parliament’s Economic and Development Committee, pushed back. They accused the opposition (NPP) of selectively using data to undermine Ghana’s broader economic achievements and stability. The Majority argues that the program is essential for building national reserves and that the figures are being politicized.

Public Sentiment

Outside of Parliament, the general public has expressed frustration. For many Ghanaians grappling with inflation and currency fluctuation, the idea of the state losing hundreds of millions of dollars in gold trading is unacceptable. Consequently, calls to “scrap the GoldBod” have gained traction on social media and in public discourse.

Analysis

Professor Patrick Asuming’s intervention provides a necessary counter-narrative to the emotional and political reactions. His analysis moves beyond the headline figure of $214 million to examine the structural economics of gold accumulation.

The Logic of “Mounting” vs. “Scrapping”

When Professor Asuming states that the GoldBod must be “mounted” rather than “scrapped,” he is drawing a distinction between a flawed mechanism and a failed objective. In engineering terms, if a machine is malfunctioning, the solution is repair and calibration, not demolition. Similarly, in economic policy, if a program designed to secure national wealth is currently losing funds, the logical step is to analyze the leakages and fix them.

Scrapping the program would mean Ghana abandons its strategic effort to buy gold from local miners. This could have two negative consequences:

Loss of Reserves: The state would fail to build the gold stockpile necessary to back the currency or save for rainy days.
Increased Smuggling: Without a state buyer offering competitive rates, miners may turn to illegal channels, selling gold to foreign syndicates who evade taxes and export regulations.

The “Cost of Reserves” Concept

A crucial part of Asuming’s argument is the concept of the “cost of reserves.” He asks: “The programme, as we’ve been informed, brings in reserves, and that is a benefit. However, there is a cost to it.”

Economically, holding reserves (whether in dollars or gold) is not free. It often involves an opportunity cost. If the GoldBod buys gold at a price higher than the immediate international market rate (to discourage smuggling or support local miners), it technically records a loss on that transaction. However, the long-term benefit of having that gold in the national vault—and keeping the gold within the local economy—might outweigh the immediate cash deficit. The problem, therefore, is not necessarily that a cost was incurred, but whether that cost was minimized and if the burden was placed on the right entity.

Addressing the Smuggling Variable

It is widely acknowledged that gold smuggling is a major drain on the Ghanaian economy. To combat this, the state often has to intervene in the market. If the GoldBod is paying premiums to local miners to compete with illegal buyers, this premium appears as a “loss” on the balance sheet. Professor Asuming suggests these losses may be the result of “planned policy choices” to secure the gold supply. Therefore, the financial deficit might actually be a proxy for the cost of enforcing the rule of law and securing national assets.

Practical Advice

For the GoldBod to transition from a source of controversy to a pillar of economic stability, specific reforms are necessary. Here is a practical roadmap for “mounting” the program effectively:

1. Operational Efficiency and Transparency

The board must publish detailed, transparent reports that break down the $214 million loss. Stakeholders need to see exactly where the money went: was it higher purchase prices, administrative bloat, storage costs, or currency fluctuations? Transparency will help separate political rhetoric from economic reality.

2. Hedging Strategies

To mitigate the risk of buying gold when prices are high, the GoldBod could explore financial hedging instruments. By locking in prices or using futures contracts, the board can protect itself against sudden market dips, reducing the volatility of reported losses.

3. Institutional Burden Sharing

As Professor Asuming suggests, the government must decide who bears the cost. If the GoldBod’s role is to support local miners and fight smuggling (a public good), the cost might legitimately be a drain on the central government’s budget rather than a failure of the GoldBod’s commercial arm. Clarifying the accounting structure is essential.

4. Strengthening the Domestic Gold Market

Instead of viewing the GoldBod solely as a profit center, policy should treat it as a market regulator. The goal should be to deepen the domestic gold value chain, ensuring that more value is retained in Ghana. This might mean accepting short-term losses for long-term industrialization benefits.

FAQ

What is the GoldBod?

The “GoldBod” refers to the state agency (often linked to the Bank of Ghana or a specific Gold Board) responsible for purchasing gold from local miners to build the nation’s foreign exchange reserves and stabilize the economy.

Why is there a controversy about the $214 million loss?

The loss occurred despite record-high global gold prices. This paradox has led to accusations of mismanagement from the opposition, while the government defends the losses as necessary costs to combat smuggling and support local miners.

Does Professor Asuming want the program scrapped?

No. He explicitly states that the program should not be scrapped. He argues that the correct response is to analyze how to minimize the losses and fix the operational issues (“mounting”) rather than abandoning the program entirely.

How does gold smuggling affect the economy?

Gold smuggling deprives the state of tax revenue and foreign exchange. When gold is smuggled out, the country loses the potential to use that gold to back the currency or pay for imports, weakening the overall economy.

What are the political implications?

The issue has polarized Parliament. The Minority views the loss as a scandal warranting cancellation, while the Majority views it as a targeted attack on the government’s economic record. This political noise complicates the implementation of necessary technical reforms.

Conclusion

The debate over the GoldBod’s $214 million loss is more than a simple accounting dispute; it is a fundamental test of Ghana’s economic strategy. While the instinct to scrap a program that shows a deficit is understandable, Professor Patrick Asuming’s economic analysis suggests a more nuanced path forward. The losses appear to be, at least in part, the calculated price of securing national assets and fighting smuggling.

Therefore, the future of the GoldBod lies not in its abolition, but in its reformation. By fixing the operational mechanisms, clarifying who bears the cost of reserves, and maintaining a steadfast focus on the long-term goal of economic sovereignty, Ghana can turn this controversy into a catalyst for a stronger, more resilient gold market. The priority must remain on “mounting” the structure to ensure it supports the economy rather than draining it.