Economist and University of Ghana Business School lecturer, Prof. Godfred Alufar Bokpin, has said the losses associated with the Domestic Gold Purchasing Programme (DGPP) exceed the $1.7 billion figure cited in recent discussions.

He said the actual cost of the programme goes beyond direct losses from gold trading and includes fiscal revenue forgone and other incentives introduced to make the intervention competitive.

Speaking on Accra-based Joy FM’s Super Morning Show on Monday, August 24, Prof. Bokpin said the full value chain and the pricing mechanisms used by the Bank of Ghana must be considered when assessing the programme’s cost.

“If you look at the entire value chain, the losses actually exceed the 1.7 billion dollars,” he said.

Prof. Bokpin explained that the programme involved several incentives, including discounts linked to the difference between the Bank of Ghana’s rate and the foreign exchange pricing mechanism used in the transactions.

He also said the price paid for locally produced gold became one of the highest in the region, potentially creating an incentive for gold from other countries to be smuggled through Ghana to benefit from the higher prices.

According to him, the government also abolished the 1.5 per cent final withholding tax as part of the measures to make the programme work, resulting in additional revenue forgone by the state.

He said the lost tax revenue could otherwise have been used to finance public infrastructure and social services such as roads, schools and hospitals.

Prof. Bokpin acknowledged that the programme had helped increase the flow of gold-related foreign exchange into the country, but said the benefit came at a significant cost.

“If you look at the cost at which we are achieving this, it is quite high, and I believe that if we had looked at the design and looked at the pricing mechanism objectively, transparently, and all of that, I believe that we could have minimised the cost,” he said.

He said ongoing reforms, including plans to remove the Bank of Ghana from the programme and make GoldBod the main institution responsible for domestic gold purchases, could help reduce the cost of the intervention.

The comment comes on the back of calls by the Minority Caucus in Parliament for the House to probe the losses which it has attributed to the GoldBod.