He explained that Bawa Rock, as the central entity in the programme, benefits from interest-free financing provided by the Bank of Ghana. In stark contrast, private aggregators must secure capital from commercial banks at market interest rates.
“The aggregator gets money from the Bank of Ghana. Is it interest-free? We say, yes, it’s interest-free. The self-finance aggregator gets money from their own banks. Is that interest-free? We know it’s not interest-free,” Mr Simons stated on Saturday, January 3.
He posed a rhetorical question that captured the dilemma.
“You have someone that is sourcing money commercially, competing with someone who’s getting money from the government. Who will win?”
This fundamental advantage allows Bawa Rock to operate with significantly lower costs, enabling it to outcompete private aggregators when purchasing gold directly from small-scale miners and licensed buyers.
A central complaint from the private aggregators, according to Simons, is that Bawa Rock is functioning more as a direct competitor than a coordinating apex body. Simons clarified that while there is no legal requirement for Bawa Rock to buy from the smaller aggregators, its current actions are undermining their role.
They are telling us that right now… Bawa Rock, beyond obviously the fact that it sits at the apex, is competing with the self-finance aggregators. It’s not really necessarily buying from the self-finance aggregators,” Simons reported.
This situation suggests a departure from the programme’s potential model where a state-backed entity could support a network of private aggregators, instead creating a system where a single player with superior financial backing dominates the market.
Simons also raised alarms about a lack of transparency in related processes, specifically regarding the formation of “aggregator alliances.” He cited an instance where numerous applications were submitted, but the responsible CEO indicated only one was eligible, with no clear, publicly available criteria for the decision.
“When you apply for it… the CEO says that as far as he’s concerned, only one was eligible. We don’t have any mechanism of transparency in this process,” Simons asserted.
This opacity, he argued, risks eroding trust in the programme and could lead to perceptions of favoritism or inefficient market structuring.
The Gold for Reserves Programme is a key government initiative aimed at boosting domestic gold purchases to strengthen the national central bank reserves. However, Simons’ analysis suggests the current implementation may inadvertently be crowding out private investment and competition.
However, the Chief Executive of the GoldBod, Sammy Gyamfi and policy analyst, Senyo Hosi disagreed, insisting that any challenges with appreciating the basis of any aggregator licence application rejection can be addressed if brought to the board’s attention.
