The Chief Executive of the GoldBod who doubles as National Democratic Congress (NDC) National Communications Officer, Sammy Gyamfi, has attributed reported losses under the Gold for Reserves (G4R) programme largely to accounting and policy-related factors rather than operational failure.
Speaking on Newsfile on Saturday, Mr. Gyamfi explained that about 97 per cent of the losses being discussed publicly are the result of exchange rate translation differences required under accounting rules at the Bank of Ghana.
According to him, while the Bank of Ghana acquires dollars generated from gold purchases at retail market exchange rates, accounting standards require that these inflows be converted using interbank or Bank of Ghana rates, which are typically lower.
“For accounting purposes, the dollars must be converted, even though they are not physically converted. That difference creates what accountants call an exchange rate translation loss,” he explained, adding that this accounts for the bulk of the reported losses.
Sammy Gyamfi stressed that the issue is technical and should not be misconstrued as mismanagement, noting that the central bank’s hands are tied by law on how foreign currency inflows are recorded.
He further outlined other cost components of the G4R programme, describing them as deliberate economic policy costs aimed at achieving broader national benefits.
One such cost, he said, stems from the policy decision to offer competitive prices for locally produced gold in order to curb smuggling and prevent a repeat of the sharp decline in gold exports experienced in 2021, when exports fell from 39.3 tonnes to 3.4 tonnes.
“We want to fend off smugglers and ensure export volumes do not collapse again. To do that, we must pay competitive prices, and that comes with costs,” he stated.
Mr. Gyamfi also cited operational costs of about 2.3 per cent, including gold off-take discounts, Gold Board fees, and purity losses.
On the issue of purity, he explained that Ghana relies on indicative testing methods rather than the international fire assay gold standard, which often results in differences when gold is re-tested by international buyers.
“Those purity differences can result in losses, and accountants are right to capture them,” he said.
He acknowledged that, from a “plain vanilla accounting perspective,” the programme may record losses but insisted that these were intentional and necessary trade-offs.
“These are economic policy costs for superior benefits,” Mr. Gyamfi said, maintaining that the long-term gains of stabilising reserves, curbing smuggling, and improving gold exports outweigh the short-term accounting losses.
The comments come amid ongoing public debate and political criticism over the financial performance of the Gold for Reserves programme and its impact on the Bank of Ghana’s balance sheet.
Source :www.kumasimail.com
