President of IMANI Africa, Franklin Cudjoe, has acknowledged what he describes as clear improvements in the government’s management of Ghana’s gold trading architecture but insists that reported losses under the Ghana Gold Board (GoldBod) system must be transparently accounted for and explained.
His comments add to an ongoing national debate over transparency, risk management and accountability in Ghana’s gold trading and reserve-building strategies, amid denials by GoldBod that it has incurred operational losses.
In a Facebook post reflecting on both the erstwhile Gold-for-Oil initiative and the current GoldBod framework, Mr Cudjoe said lessons had evidently been learnt by the Mahama administration to avoid repeating past policy missteps, commending GoldBod, the Bank of Ghana (BoG) and the Ministry of Finance for reforms introduced so far.
“Having followed the Gold-for-Oil and GoldBod programmes, it is clear significant lessons have been learned by the current government in order not to repeat past mistakes. And GoldBod, the Bank of Ghana and the Finance Ministry deserve enormous commendation,” he wrote.
However, Mr Cudjoe cautioned that despite the structural improvements, losses are almost inevitable under the current GoldBod operational model due to currency conversion risks involved in gold purchases and sales.
“However, it is clear the way the current GoldBod system is structured there would always be transaction losses as a result of the conversion of dollars to cedis and vice versa in the purchase of gold,” he noted.
He said he understood why GoldBod may be reluctant to formally classify such losses in its books, given its intermediary role between gold aggregators and the central bank.
“I can understand why GoldBod wouldn’t acknowledge that the losses should be classified as such on their books, because it thinks they are just playing an intermediate role between Bank of Ghana and the aggregators of gold since it is the bank that provides the cedis for gold purchases and ultimately receives proceeds of gold sold abroad in dollars,” Mr Cudjoe explained.
Nevertheless, he was emphatic that the losses, whether described as transactional or trade-related, remain losses and must be treated with the seriousness they deserve, especially given the reported scale.
“But they are losses, transactional or trade losses. $214m loss is large enough for us to understand how it occurred, the period it occurred and where they occurred (as in with which buyers of our gold and the quantum of loss per buyer),” he stated.
According to him, providing such clarity would serve two critical purposes: helping authorities minimise future losses and preventing any potential abuse of privileged information within the system.
“This helps in two ways – 1. In order to minimise them if they were genuinely incurred and to help prevent a gaming / rigging due to privileged information or as it is commonly called, insider information, regardless of whether the spot and onward sale price of gold are displayed by GoldBod,” he said.
Mr Cudjoe further called on the Bank of Ghana to publicly account for the reported losses and outline measures being taken to prevent a recurrence.
“And I think the Bank of Ghana should provide answers to how the $214m loss happened and what they will do to minimise it in future transactions,” he added.
He also expressed concern that details of the alleged losses only came to public attention through disclosures linked to the International Monetary Fund (IMF), rather than proactive communication by domestic institutions.
“My worry though is that it had to take the IMF to receive this information and then publish for us to knock our heads discussing what name to call it. Not good!” he concluded.
