Domestic Gold Purchase Programme drained Bank of Ghana's finances - IMF

The International Monetary Fund (IMF) has cautioned that Ghana’s Domestic Gold Purchase Programme (DGPP) placed significant pressure on the finances of the Bank of Ghana (BoG), despite the programme’s role in supporting the cedi and rebuilding the country’s reserves.

IMF Resident Representative in Ghana, Dr Adrian Alter, said the programme had generated significant losses for the central bank and raised concerns about its governance, transparency and reporting.

Speaking on Channel One TV on Monday, August 24, Dr Alter stated that the DGPP was one of the factors behind the deterioration of the BoG’s balance sheet.

According to him, the central bank’s equity stood at about 7% at the end of 2025, with the Domestic Debt Exchange Programme (DDEP) and the gold purchase programme both contributing to the decline.

“The lessons from the Domestic Gold Purchase Programme are also that we need to be careful about governance, transparency, reporting, and care about the costs incurred by the programme,” he said.

Dr Alter also cautioned the central bank against taking on quasi-fiscal activities, arguing that such operations could weaken its balance sheet and affect its ability to focus on its main responsibility of maintaining price stability.

“The main point here is that the central bank cannot be involved in this quasi-fiscal activity, because its balance sheet is deteriorating, and that basically can interfere with its primary mandate, which is price stability,” he noted.

Despite the concerns, he acknowledged the positive impact of higher gold export earnings on Ghana’s economy.

Dr Alter said increased gold proceeds had helped support the stability of the cedi and contributed to the rebuilding of Ghana’s international reserves.

However, he mentioned that the benefits must be weighed against the financial costs of the programme.

The IMF also highlighted the importance of protecting the independence of the BoG to prevent fiscal dominance.

Dr Alter stressed that the central bank should not be used to finance government entities, arguing that government should instead raise funds through financial markets and commercial banks.

EXPLAINER: What drove the GH¢21.88 billion gold programme loss?

“The second one is central bank independence. That’s key. When you talk about fiscal dominance, basically lending to the government, you need an independent central bank,” he said.

The gold purchasing and selling operations have since been transferred from the BoG to the Ghana Gold Board (GoldBod), separating the activities from the central bank’s core monetary policy functions.

The IMF’s assessment of the DGPP showed that the programme was associated with losses of about GH¢22 billion, equivalent to roughly US$1.7 billion, in 2025.

DR/SA