Bank of Ghana's Gold Loss: IEA Says Most of It Is Accounting Smoke

The Domestic Gold Purchase Programme of the Bank of Ghana has been under scrutiny due to a reported loss of US$1.7 billion, but according to the Institute of Economic Affairs (IEA), this figure is largely an accounting matter.

Professor Alexander Bilson-Darku, Director of Research at the IEA, stated that nearly 90% of the reported loss is due to valuation differences in how transactions are recorded on the Bank of Ghana's books. He explained that when GoldBod purchases gold on behalf of the central bank, the proceeds are converted into cedis using a reference rate for accounting purposes, which may not reflect the actual exchange rate at the time.

The IEA research director emphasized that the first two components of the reported loss simply represent payments made by the central bank to GoldBod for gold purchased and exported on behalf of the Bank of Ghana. These payments are actually revenue to the Gold Board, not a loss to the state as a whole.