1. The thing with Newsfile is that it activates an audience that generally don't read our essays or even posts here.
2. That's great but it is a primetime show so time is limited and many of the things that we have discussed at great length and carefully in our essays don't get airing.
3. The trick, I guess, is to use the attention Newsfile brings to get more people to know more about the issues we are working on.
4. In case, you only got interested in these issues because of Newsfile, here are two articles that explain WHY some of us have been talking about GoldBod.
This one explains very clearly how the losses came about:
brightsimons.com/2025/12/is-…
This one advises against trying to paper over the losses:
brightsimons.com/2025/12/is-…
5. For those who think we just sprang up and started "criticising" the GoldBod, you can read our concerns before it started operating here:
brightsimons.com/2025/03/all…
6. Some of the issues we are facing now originates from some confusion in how GoldBod was structured from the start. Mixing the regulatory, policy, and commercial logics up will continue to create some serious tensions worth keeping an eye on.
7. If you want to understand our "problem" in a nutshell before you even bother reading, fine, I am attaching a few infographics that should simplify the "Gold for Reserves" program that GoldBod inherited and is now running under its model.
8. First, we needed to establish that there were REAL losses because our analysis flows from that point. I have attached the "flow-sequence" from the first article that shows that "losses are inherent" in how GoldBod's trades are structured. Try and internalise it.
9. Second, it is important to realise that if the original GoldBod model of trading on its own balance sheet starts, losses like that would erode the capital of GoldBod. GoldBod itself accepts that these losses, regardless of how it calls them, CAN'T CONTINUE. Which means the "losses" can't be a good thing.
10. Third, the current Bank of Ghana (BoG) based model has huge risks as outlined in the infographic below. I have also attached a clear step by step tutorial.
Here is a simple way to grasp it: a) every country obtains foreign exchange by doing PRODUCTIVE ACTIVITY THAT IS EXPORTED AT A PROFIT TO REMAIN SUSTAINABLE. b) how then can BoG engage in an unprofitable venture, export (gold), and still sustainably bring in forex?
Short answer: it can't. It will have to cover the losses by borrowing or by printing money and then borrowing to "mop up" the excess Cedis. If the price of gold then falls, it gets into a vicious cycle which can derail both inflation targeting and exchange rate stability.
At some point in 2024, market FX interventions stopped having the desired effect for a similar reason.
11. Why do we bother with all this advocacy? Because the things that cause financial crises, "haircuts", "dumsor", "galamsey" and all the issues that have held Ghana back as a nation starts in complex, diffuse, seemingly minor ways.
12. We don't pay attention and then they balloon and get out of hand. Hence, it makes sense for us to pay attention to the "granular detail" of government policies even though they may look boring and advocates of such issues may sound like naggers and naysayers.
13. In the case of the GoldBod model, what we seek to avoid is twofold: a) a case of Ghana sleepwalking into massive financial liabilities as we have seen with many state-owned enterprises, from ECG to Cocobod; and
14. b) some people in the future (perhaps even after the current bosses are gone) hiding behind murky losses to pass "margins" to their friends.
15. The clearer things are for a significant section of the population, the lower the chances of either of the two issues happening. With full value-chain transparency, we will be able to apply the brakes before the train skids off the track.
Have a fun weekend!