Economist and Professor Godfred Alufar Bokpin has issued a forceful critique of the Ghana Gold Board’s role in bolstering Ghana’s macroeconomic stability, asserting that the board’s contributions should not be solely attributed to its involvement in gold-related foreign exchange. Professor Bokpin contends that the broader gains in macroeconomic stability are primarily driven by fiscal and monetary policy, rather than the Gold Board’s direct influence. He argues that the Gold Board’s arrangement, initially intended to reduce gold smuggling and increase foreign exchange retention, has resulted in significant financial losses, which he contends must be carefully considered when assessing its overall impact. ‘You can see that the gap has narrowed significantly with the introduction of Gold Board. And I think that is a credit to Gold Board,’ he stated, referencing the significant reduction in gold smuggling. He further notes that the NPP and NDC, both identified challenges surrounding illegal mining, gold production, and election reporting ahead of the 2024 elections, highlighted the Gold Board’s initial role. The NPP proposed reducing the final withholding tax on gold exports, while the NDC opted for the Gold Board to assume a central role in buying and exporting gold, particularly from artisanal and small-scale miners, as the primary entity responsible for this function. Professor Bokpin asserts that the Gold Board arrangement has inadvertently contributed to a substantial loss to the state, noting that estimates suggest a potential cost of $22 billion to $1.7 billion, exceeding initial discussions. He points to specific instances of losses reported in connection with the domestic gold purchase program, highlighting that the overall cost could be substantially higher than previously projected. Furthermore, he highlighted the abolition of the 1.5% withholding tax on artisanal and small-scale gold production as another substantial cost to the state. ‘So, you have all these losses sitting on the books of the Bank of Ghana. Is that okay? In addition to that, we had to abolish the 1.5%,’ he said, emphasizing the magnitude of the financial repercussions. He maintained that the fiscal implications become even more pronounced when considering the value of gold exports from artisanal and small-scale miners, which are projected to surpass $10 billion annually. ‘If you look at the total gold exports from artisanal small-scale miners, which are more than $10 billion, is that okay? And you want to do the analysis in terms of the fiscal losses, which could have gone to our revenue envelope, probably to fund roads, schools, and infrastructure, we have to give up that one also,’ he stressed, acknowledging the program’s benefits. Despite his reservations, Professor Bokpin underscored the program’s overall positive impact, stating, ‘I recognise the impact of Gold Board, and I celebrate the progress that they have made in terms of crowding in gold-related FX.’ He concluded by asserting that the substantial losses should not be overlooked, advocating for a plan to mitigate these losses through the Bank of Ghana’s exit strategy, reducing losses from approximately 17% to 5% by the end of 2024. He reiterated the importance of a robust exit plan to address the ongoing financial challenges associated with the Gold Board’s intervention.”}”””””””””””””””””””””””””””””””
Source: Adom Online
