Without BoG funding, GoldBod would be insolvent within ~11 months – Bright Simons

Senior Vice President of Imani Ghana, Bright Simons, has warned that GoldBod would become insolvent within about 11 months without continued funding from the Bank of Ghana, following significant losses recorded in its gold trading operations.

In a detailed analysis, Mr Simons stated that GoldBod incurred losses of about US$214 million on roughly US$5 billion worth of gold, a loss rate he described as real and substantially higher than that which has burdened COCOBOD in recent years. He, however, stressed that the losses do not present the full picture, as the Bank of Ghana also absorbs additional sterilisation and opportunity costs linked to the programme.

According to him, the losses are structural, arising from GoldBod’s operational model, which often forces it to buy gold at higher prices and sell at lower prices than is optimal. He noted that GoldBod’s undisbursed 2025 budget allocation of US$279 million would last less than one year without central bank support.

Mr Simons acknowledged that GoldBod contributed to the relative stability of the cedi in 2025, but insisted it was not the main driver. He explained that exchange rate movements are influenced by numerous variables, and while gold exports play an important role, even a more than 70 per cent rise in gold prices in 2025 historically explains only about eight percentage points of foreign exchange strength.

He pointed out that the cedi appreciated by about 24 per cent between end-2024 and end-2025, with the remaining gains largely driven by IMF-backed fiscal discipline, debt restructuring and policy interventions. On this basis, he estimated GoldBod’s maximum plausible contribution to cedi stability at about three percentage points.

Mr Simons cautioned that continued losses would weaken the Bank of Ghana’s net reserve accumulation and impose further costs, as the central bank creates money to purchase gold and must later sterilise it to avoid inflation. He warned that a fall in gold prices would significantly magnify these risks in a procyclical manner.

He concluded that exchange rate stability should not be built on opaque subsidies, urging caution and transparency in state-led gold programmes. According to him, if such programmes are maintained, their sustainability will remain heavily dependent on persistently high gold prices, noting that “in the end, the ledger always balances.”