GoldBod CEO credits Bawumia for domestic gold purchase policy, but faults implementation

The chief executive of the Ghana Gold Board has credited former vice-president Mahamudu Bawumia and his economic team with conceiving Ghana’s Domestic Gold Purchase Programme, in a rare acknowledgement across the country’s political divide of continuity in economic policymaking.

Sammy Gyamfi said the programme introduced under the previous New Patriotic Party administration was sound in conception, particularly in its attempt to use Ghana’s considerable gold production to strengthen foreign exchange reserves and provide greater support for the cedi.

But he drew a distinction between the policy’s underlying idea and the way it was executed.

“Domestic Gold Purchase Programme was well-intended, but not well implemented,” Gyamfi said during a Twitter Spaces discussion on Sunday.

“I give Bawumia and his team the credit,” he added.

The comments are significant because they inject a degree of policy continuity into an area that has become central to Ghana’s macroeconomic strategy.

For years, Africa’s largest gold producer has faced a paradox: it exports billions of dollars of bullion annually but has historically struggled to translate that mineral wealth into sufficiently large foreign exchange buffers, particularly during periods of external stress.

The Domestic Gold Purchase Programme sought to change that relationship by allowing the Bank of Ghana to purchase locally produced gold and accumulate the metal as part of its reserves.

The underlying proposition was straightforward. Rather than relying overwhelmingly on foreign currency purchases to build international reserves, Ghana could convert part of its domestically produced mineral wealth into reserve assets.

That strategy became particularly relevant as the country confronted severe foreign exchange pressures and dwindling confidence during the economic crisis that culminated in Ghana seeking support from the International Monetary Fund.

Gyamfi’s acknowledgement therefore matters beyond the immediate partisan debate over who deserves credit.

It suggests that the broad economic principle behind using domestic gold as an instrument of reserve accumulation has survived the transition from the Akufo-Addo administration to President John Mahama’s government.

What has changed, according to the GoldBod chief, is the institutional architecture through which that strategy is pursued.

Gyamfi said the previous Domestic Gold Purchase Programme has ended and that GoldBod is now responsible for buying and selling gold as well as managing the associated foreign exchange transactions with the Bank of Ghana.

The distinction is central to the government’s argument that GoldBod is not simply a renamed continuation of the earlier programme.

Established under legislation passed in 2025, the Ghana Gold Board was given broad authority over the purchase, assaying, sale and export of gold, particularly output originating from the artisanal and small-scale mining sector.

That represents an attempt to consolidate activities previously dispersed across several institutions and market participants.

The economic stakes are substantial.

Ghana’s small-scale mining industry produces significant quantities of gold but has long been characterised by informality, smuggling, weak traceability and fragmented regulation. Gold leaving the country outside official channels represents not merely lost tax revenue but foregone foreign exchange that could otherwise pass through the formal financial system.

Bringing more of those flows within a centralised purchasing architecture could therefore strengthen the state’s ability to capture export proceeds while increasing transparency across the gold value chain.

Yet the model carries risks of its own.

Any state-backed gold purchasing system ultimately depends on disciplined financing, transparent pricing and robust risk management. If gold is purchased domestically at prices or exchange rates that create persistent losses, the macroeconomic benefits of accumulating the metal can be offset by fiscal or central bank costs.

This is where Gyamfi’s criticism of the previous programme becomes economically important.

His argument is essentially that Ghana should distinguish between the strategic value of buying domestic gold and the financial mechanics used to achieve it.

The challenge for GoldBod will consequently be to demonstrate that its new institutional framework can deliver the original objective more efficiently accumulating gold, capturing foreign exchange, reducing smuggling and strengthening reserves without transferring excessive financial risk to the Bank of Ghana or the taxpayer.

It will also have to demonstrate transparency.

A state institution occupying such a dominant position in the domestic bullion market will inevitably attract scrutiny over purchasing prices, counterparties, financing arrangements, export revenues and operating costs. The greater GoldBod’s role becomes, the stronger the requirement for regular disclosure and independently verifiable accounts.

For Bawumia, meanwhile, Gyamfi’s comments offer political validation of one of the more unconventional elements of the previous administration’s economic strategy.

The former vice-president championed policies aimed at leveraging gold to ease Ghana’s dependence on scarce foreign currency, including initiatives associated with domestic gold purchases and the wider gold-for-oil framework.

Gyamfi’s remarks do not amount to an endorsement of how those initiatives were managed. Indeed, his central contention remains that implementation fell short.

But acknowledging the intellectual origins of the policy creates an important distinction between political ownership and economic usefulness.

Ghana’s economic history is littered with reforms that have been abandoned or rebranded following changes of government, often at considerable cost. The evolution from the Domestic Gold Purchase Programme towards GoldBod may offer a different model: retain an economically useful idea, redesign the weaknesses in its implementation and construct stronger institutions around it.

Whether GoldBod ultimately represents that improvement will depend less on political claims than measurable outcomes.

Its performance will need to be judged by the amount of previously informal gold brought into official channels, the foreign exchange generated, its contribution to reserve accumulation, the cost at which those outcomes are achieved and the transparency with which the institution operates.

For now, Gyamfi’s intervention establishes an unusually clear point of agreement between political rivals.

Bawumia and his team, he says, deserve credit for the idea.

The more consequential question is whether Ghana’s new gold-trading architecture can prove that the second attempt at implementing that idea is economically stronger than the first.