Sic Parvis Magna

@____BlackStone

Rough pen…

Gontranno Sanctuary

Joined July 2019

2.6K Following

478 Followers

9.3K Posts

____BlackStone retweeted

Bright Simons @BBSimons

4 days ago

1. Analysts like @CallmeAlfredo have been talking and writing about GoldBod for more than a year. On these streets, we have dissected and trisected every aspect of the issue. 2. All of a sudden, politicians jump into the fray, stay strictly on the surface, add no new insights, and the whole country is immediately agog as if the Ark of Covenant has been found...at Achiase. 3. People now start coming to my page asking me why "I am not talking about GoldBod." Seriously? 4. Seriously, Ghanafou? 5. So, if politicians don't move national debate, you won't be interested? You won't read what independent analysts write for your own education unless there is a political controversy? 6. When I complain about Katanomics (the inability of POLICY to compete with POLITICS in Africa, leading to shallow solutions that keep the same problems recurring without any "learning"), this situation right here is the perfect example. 7. Naturally, I wasn't going to rehash the plenty explanations and analysis of the last one year, but reading some of the questions I keep getting, I think there is one specific aspect of the affair that most people simply don't get and if they did they would be in a better position to educate themselves about the rest of the issues. (In this post, my goal is to really simplify, which carries the risk of oversimplification. You will see that even a simple explanation is much too long for this format, so further simplification is impossible. Anyone looking for "sophisticated" analysis can read any of the dozen articles written on the subject.) Here goes: 8. Most people accept (except die hard motivated reasoning party fanatics) that over the course of 2025, GoldBod bought roughly $10 billion of gold but the Bank of Ghana received value for about $8.3bn. Some prefer to call this "costs" and others "losses." 9. The only reason, in my view, why objective people are confused is because of how the costs and benefits of the entire state-run gold trading scheme have been defined. People have been led to the impression that GoldBod *GENERATED* $10bn worth of dollars in 2025. 9. Put another way: that somehow without GoldBod $10 billion wouldn't have come into Ghana. In that sense even if Ghana lost/spent $1.7bn, the country has still benefitted enormously. This is shallow analysis. And it is the one confusion most worth clearing up. 10. GoldBod doesn't produce gold. GoldBod doesn't invest in gold production. It hopes to get there someday but it is not there yet. 11. The gold we are talking about was produced, mostly, by small-scale Ghanaian mining operators. We believe that this includes both legal and illegal (galamsey) producers but that is another discussion for another day. These miners were the ones who invested to produce the gold. 12. Would they have produced $10bn of gold without GoldBod? Would $8.3bn have come into Ghana? If the answer is "yes" to any of these questions, then GoldBod is a waste of money because we are paying them for adding no value (they charged the country through BoG about GHS 558 million for their services). 13. If the answer is "no", then the question becomes: how much would the small-scale mines have produced and how much of the resulting "gold dollars" would have come to Ghana? GoldBod's contribution is the DIFFERENCE between $8.3 billion and whatever number pops out from that analysis. Clear? 14. So, say, you argue that without GoldBod, Ghanaian miners would have produced $7bn and brought in $6bn (due to "leakages", which we will discuss later), then GoldBod's value to Ghana is between $1.3bn and $2.3bn. The question is: what is the actual number? 15. That is where the REALLY SERIOUS debate had been about until the politicians came and sucked all the oxygen from the room. They succeeded because politics is a masses business and policy is an elite business. Mass media will always be dominated by what the masses engage with. ("Elite" as used here does not connote superiority, only "social division of responsibility".) Until we find a way to link politics and policy in Africa more effectively, we are doomed. That is the task the Katanomics Society (www dot katanomics dot org) exists to confront. 16. Going back to the analysis, note that gold producers are business people. They will produce gold without prompting if there is a ready market for it, and there is. They have always had a way to sell that gold and they don't get any investment from GoldBod, so most of us can agree that the production of gold has little to do with GoldBod. The real controversy then is about how much of the gold dollars would have come to Ghana. And this raises two issues: smuggling and leakage. 18. Some of us argue that smuggling doesn't necessarily lead to much leakage. If Ghanaian gold producers sell as close to the international market price as possible in Cedis to Lebanese, Indian, or Chinese smugglers, then even if those people take the gold away to sell in dollars, those dollars won't be entirely lost to the Ghanaian economy. This may sound scandalous. But keep your shirt on, and continue reading. 19. Firstly, we have to be sure about the scale of smuggling and why people do it. I have argued elsewhere that those who do it to evade broader taxes (such as corporate and personal income taxes) have such a huge incentive that nothing will stop them. Which is why, even with GoldBod, we still have smuggling. But let's for now assume a kind of smuggling that can truly be stopped by GoldBod following passage of laws that have stopped all formerly legal exporters from exporting. 20. The key insight I want to leave you with is that even Smugglers still need to convert MOST of the gold dollars they get from smuggling gold abroad back into Cedis to keep buying the gold locally to smuggle outside. What they keep is their profit, which is the margin between what Ghanaian gold producers sell the gold to them for and the international market price. In a highly competitive market, that margin will drop to as low as possible. It definitely won't be the 17% that the new model loses. It will very likely not exceed 3%. 21. That means that the gold dollars will still come into the economy (minus profits of the smugglers) but it won't go to the Bank of Ghana. It will go to commercial banks and Aboki. That is another competitive market that will allot the dollars due to the real demand in the economy. 22. Nonetheless, let us accept that such an outcome doesn't sit well with you as a law-abiding Ghanaian. And you just feel that the gold dollars are best allocated by an omniscient, all-wise, Bank of Ghana. The truth is that the Bank of Ghana will still sell back into the market for people that need dollars. Whatever route gold dollars take, they end up in the same commercial market. 23. The only caveat, therefore, is that the GoldBod model routes most of the dollars through the Bank of Ghana, which grants BoG the choice to set a lower price for the dollars than the market may have done. That is what they mean when they say most of the losses are due to "exchange rate" losses. The whole GoldBod - BoG system is tightly connected to allow BoG to set dollar prices lower than normal demand and supply would have permitted. It is this "benefit" of GoldBod and the previous Domestic Gold Purchasing Programs (DGPP) that must be carefully valued. 24. How does one value this GoldBod role? This power it has given to the Bank of Ghana to subsidise the dollar rate? Is it worth $1.7bn? Obviously, it is much harder to analyse than the crude way we began with (by assuming the entire $8.3bn was some kind of bonanza from GoldBod). Now let me tell you the problem some of us have with this GoldBod "benefit". 25. The price of gold has more than doubled since 2021 (in both 2021 and 2022, average prices hovered around $1800 versus over $4500 today). For the same investment Ghanaian gold miners/producers would have made in 2021, the country gets twice the amount of dollars. Nothing whatsoever to do with GoldBod. 26. Supposing we were producing the same quantity of gold in 2021 from the small scale and artisanal sector. as we are doing today. The country would have received $5bn then. Now, for roughly the same underlying investment, it gets $10bn. That is $5bn extra "PROFIT". In such an arrangement, even if we create an inefficient bureaucracy that leads to $1.7bn in losses, we are still left with $3.3 billion more than we would have received before. Because the strength of the Cedi is roughly determined by the amount of dollars in circulation, the massive increase in gold prices will always benefit the country whether or not there is a GoldBod. 27. Study the attached graphs carefully. They show you historic episodes when Ghana enjoyed relative stability of the Cedi. They also show how external factors such as commodity prices have historically shaped the domestic experience of exchange rates and cost of living. Comparing Ghana's situation with peers across Africa, it is evident that the benign external environment of recent months (including unorthodox policies in the US that are weakening the dollar and boosting precious mineral prices) is not getting sufficient attention in Ghana. 28. The problem is what happens when that external picture and the positive cyclical trends change for the worse. What happens if Ghana's dollar flow halves because prices drop by 50%? Where would the government now hide the $1.7bn "losses" or "costs"? 29. Especially when the need to subsidise the cedi rate becomes even more intense precisely when the currency is under pressure. 30. That is why despite all the spin and confusion, the Bank of Ghana admits that there is a problem building up for the country. And has thus stopped directly funding the purchases of gold and is pushing for losses/costs to come down to 5%. Can it succeed? 31. This is where the Minority's push for transparency is useful. Without detailed modelling of the loss drivers, we can't be confident that the BoG-GoldBod alliance can. Let's look at the main risks one after the other. 32. The "exchange rate loss" component of the whole setup depends on how aggressively the Bank of Ghana intends to continue subsidising the Cedi. We need to have an honest conversation about that. What should the right Cedi - dollar rate band be? 33. The loss from paying miners very close to the international price (leaving too little a margin for other costs) is set by a simple decision of how much smuggling we are willing to tolerate. 34. And the loss from selling the gold at a price significantly lower than the international market rate is driven by good governance. Right now the system is opaque and no one except BoG and GoldBod knows if all buyers are getting the same deal and on the same basis. It is easily abused. The Minority in Parliament is absolutely correct that we must force GoldBod and the BoG to disclose all the offtake contracts from the dawn of the programs. 35. Like I said, so long as the price of gold stay well above $3000, there will always be room to absorb considerable policy inefficiencies. Should it start to drop well below $4000 wahala will gas! Knowing what I know about Ghana, I think we will just wait and see before any serious national consensus will build. 36. Each of the points above deserves its own 5000 word article. Yes, policy is damn hard both to think through right and to do right! Which is why without enough citizens being interested in pushing it, politics will always win and the katanomic condition will prevail. 37. I hope though that having read to this point, you now understand why some of us can't participate in shallow debates. 38. And the issue of whether or not the gold trading losses (shared jointly by GoldBod and BoG because they both set prices and impact volume decisions) are a problem is now much clearer to you now than before. 39. If you want even more emphatic and sophisticated analysis than this introductory one, you just need to spare 30 minutes and read the pieces I am attaching to this thread. And of course, pay attention to the attachments. 40. Keep faith with Ghana but never stop asking hard questions and thinking deeper beneath the surface. That is how we will bring down katanomics!

BBSimons's tweet photo. 1. Analysts like @CallmeAlfredo have been talking and writing about GoldBod for more than a year. On these streets, we have dissected and trisected every aspect of the issue.

2. All of a sudden, politicians jump into the fray, stay strictly on the surface, add no new insights, and the whole country is immediately agog as if the Ark of Covenant has been found...at Achiase.

3. People now start coming to my page asking me why "I am not talking about GoldBod." Seriously?

4. Seriously, Ghanafou?

5. So, if politicians don't move national debate, you won't be interested? You won't read what independent analysts write for your own education unless there is a political controversy?

6. When I complain about Katanomics (the inability of POLICY to compete with POLITICS in Africa, leading to shallow solutions that keep the same problems recurring without any "learning"), this situation right here is the perfect example.

7. Naturally, I wasn't going to rehash the plenty explanations and analysis of the last one year, but reading some of the questions I keep getting, I think there is one specific aspect of the affair that most people simply don't get and if they did they would be in a better position to educate themselves about the rest of the issues.

(In this post, my goal is to really simplify, which carries the risk of oversimplification. You will see that even a simple explanation is much too long for this format, so further simplification is impossible. Anyone looking for "sophisticated" analysis can read any of the dozen articles written on the subject.)

Here goes:
8. Most people accept (except die hard motivated reasoning party fanatics) that over the course of 2025, GoldBod bought roughly $10 billion of gold but the Bank of Ghana received value for about $8.3bn. Some prefer to call this "costs" and others "losses."

9. The only reason, in my view, why objective people are confused is because of how the costs and benefits of the entire state-run gold trading scheme have been defined. People have been led to the impression that GoldBod *GENERATED* $10bn worth of dollars in 2025.

9. Put another way: that somehow without GoldBod $10 billion wouldn't have come into Ghana. In that sense even if Ghana lost/spent $1.7bn, the country has still benefitted enormously. This is shallow analysis. And it is the one confusion most worth clearing up.

10. GoldBod doesn't produce gold. GoldBod doesn't invest in gold production. It hopes to get there someday but it is not there yet.

11. The gold we are talking about was produced, mostly, by small-scale Ghanaian mining operators. We believe that this includes both legal and illegal (galamsey) producers but that is another discussion for another day. These miners were the ones who invested to produce the gold.

12. Would they have produced $10bn of gold without GoldBod? Would $8.3bn have come into Ghana? If the answer is "yes" to any of these questions, then GoldBod is a waste of money because we are paying them for adding no value (they charged the country through BoG about GHS 558 million for their services).

13. If the answer is "no", then the question becomes: how much would the small-scale mines have produced and how much of the resulting "gold dollars" would have come to Ghana? GoldBod's contribution is the DIFFERENCE between $8.3 billion and whatever number pops out from that analysis. Clear?

14. So, say, you argue that without GoldBod, Ghanaian miners would have produced $7bn and brought in $6bn (due to "leakages", which we will discuss later), then GoldBod's value to Ghana is between $1.3bn and $2.3bn. The question is: what is the actual number?

15. That is where the REALLY SERIOUS debate had been about until the politicians came and sucked all the oxygen from the room. They succeeded because politics is a masses business and policy is an elite business. Mass media will always be dominated by what the masses engage with. ("Elite" as used here does not connote superiority, only "social division of responsibility".) Until we find a way to link politics and policy in Africa more effectively, we are doomed. That is the task the Katanomics Society (www dot katanomics dot org) exists to confront.

16. Going back to the analysis, note that gold producers are business people. They will produce gold without prompting if there is a ready market for it, and there is. They have always had a way to sell that gold and they don't get any investment from GoldBod, so most of us can agree that the production of gold has little to do with GoldBod. The real controversy then is about how much of the gold dollars would have come to Ghana. And this raises two issues: smuggling and leakage.

18. Some of us argue that smuggling doesn't necessarily lead to much leakage. If Ghanaian gold producers sell as close to the international market price as possible in Cedis to Lebanese, Indian, or Chinese smugglers, then even if those people take the gold away to sell in dollars, those dollars won't be entirely lost to the Ghanaian economy. This may sound scandalous. But keep your shirt on, and continue reading.

19. Firstly, we have to be sure about the scale of smuggling and why people do it. I have argued elsewhere that those who do it to evade broader taxes (such as corporate and personal income taxes) have such a huge incentive that nothing will stop them. Which is why, even with GoldBod, we still have smuggling. But let's for now assume a kind of smuggling that can truly be stopped by GoldBod following passage of laws that have stopped all formerly legal exporters from exporting.

20. The key insight I want to leave you with is that even Smugglers still need to convert MOST of the gold dollars they get from smuggling gold abroad back into Cedis to keep buying the gold locally to smuggle outside. What they keep is their profit, which is the margin between what Ghanaian gold producers sell the gold to them for and the international market price. In a highly competitive market, that margin will drop to as low as possible. It definitely won't be the 17% that the new model loses. It will very likely not exceed 3%.

21. That means that the gold dollars will still come into the economy (minus profits of the smugglers) but it won't go to the Bank of Ghana. It will go to commercial banks and Aboki. That is another competitive market that will allot the dollars due to the real demand in the economy.

22. Nonetheless, let us accept that such an outcome doesn't sit well with you as a law-abiding Ghanaian. And you just feel that the gold dollars are best allocated by an omniscient, all-wise, Bank of Ghana. The truth is that the Bank of Ghana will still sell back into the market for people that need dollars. Whatever route gold dollars take, they end up in the same commercial market.

23. The only caveat, therefore, is that the GoldBod model routes most of the dollars through the Bank of Ghana, which grants BoG the choice to set a lower price for the dollars than the market may have done. That is what they mean when they say most of the losses are due to "exchange rate" losses. The whole GoldBod - BoG system is tightly connected to allow BoG to set dollar prices lower than normal demand and supply would have permitted. It is this "benefit" of GoldBod and the previous Domestic Gold Purchasing Programs (DGPP) that must be carefully valued.

24. How does one value this GoldBod role? This power it has given to the Bank of Ghana to subsidise the dollar rate? Is it worth $1.7bn? Obviously, it is much harder to analyse than the crude way we began with (by assuming the entire $8.3bn was some kind of bonanza from GoldBod). Now let me tell you the problem some of us have with this GoldBod "benefit".

25. The price of gold has more than doubled since 2021 (in both 2021 and 2022, average prices hovered around $1800 versus over $4500 today). For the same investment Ghanaian gold miners/producers would have made in 2021, the country gets twice the amount of dollars. Nothing whatsoever to do with GoldBod.

26. Supposing we were producing the same quantity of gold in 2021 from the small scale and artisanal sector. as we are doing today. The country would have received $5bn then. Now, for roughly the same underlying investment, it gets $10bn. That is $5bn extra "PROFIT". In such an arrangement, even if we create an inefficient bureaucracy that leads to $1.7bn in losses, we are still left with $3.3 billion more than we would have received before. Because the strength of the Cedi is roughly determined by the amount of dollars in circulation, the massive increase in gold prices will always benefit the country whether or not there is a GoldBod.

27. Study the attached graphs carefully. They show you historic episodes when Ghana enjoyed relative stability of the Cedi. They also show how external factors such as commodity prices have historically shaped the domestic experience of exchange rates and cost of living. Comparing Ghana's situation with peers across Africa, it is evident that the benign external environment of recent months (including unorthodox policies in the US that are weakening the dollar and boosting precious mineral prices) is not getting sufficient attention in Ghana.

28. The problem is what happens when that external picture and the positive cyclical trends change for the worse. What happens if Ghana's dollar flow halves because prices drop by 50%? Where would the government now hide the $1.7bn "losses" or "costs"?

29. Especially when the need to subsidise the cedi rate becomes even more intense precisely when the currency is under pressure.

30. That is why despite all the spin and confusion, the Bank of Ghana admits that there is a problem building up for the country. And has thus stopped directly funding the purchases of gold and is pushing for losses/costs to come down to 5%. Can it succeed?

31. This is where the Minority's push for transparency is useful. Without detailed modelling of the loss drivers, we can't be confident that the BoG-GoldBod alliance can. Let's look at the main risks one after the other.

32. The "exchange rate loss" component of the whole setup depends on how aggressively the Bank of Ghana intends to continue subsidising the Cedi. We need to have an honest conversation about that. What should the right Cedi - dollar rate band be?

33. The loss from paying miners very close to the international price (leaving too little a margin for other costs) is set by a simple decision of how much smuggling we are willing to tolerate.

34. And the loss from selling the gold at a price significantly lower than the international market rate is driven by good governance. Right now the system is opaque and no one except BoG and GoldBod knows if all buyers are getting the same deal and on the same basis. It is easily abused. The Minority in Parliament is absolutely correct that we must force GoldBod and the BoG to disclose all the offtake contracts from the dawn of the programs.

35. Like I said, so long as the price of gold stay well above $3000, there will always be room to absorb considerable policy inefficiencies. Should it start to drop well below $4000 wahala will gas! Knowing what I know about Ghana, I think we will just wait and see before any serious national consensus will build.

36. Each of the points above deserves its own 5000 word article. Yes, policy is damn hard both to think through right and to do right! Which is why without enough citizens being interested in pushing it, politics will always win and the katanomic condition will prevail.

37. I hope though that having read to this point, you now understand why some of us can't participate in shallow debates.

38. And the issue of whether or not the gold trading losses (shared jointly by GoldBod and BoG because they both set prices and impact volume decisions) are a problem is now much clearer to you now than before.

39. If you want even more emphatic and sophisticated analysis than this introductory one, you just need to spare 30 minutes and read the pieces I am attaching to this thread. And of course, pay attention to the attachments.

40. Keep faith with Ghana but never stop asking hard questions and thinking deeper beneath the surface. That is how we will bring down katanomics!

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____BlackStone retweeted

@TheK_Nox

11 days ago

Women will ask you for help to open a jar and then go to the gym and hip thrust 4 plates

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Trevoh Chalobah

@TrevohChalobah

19 days ago

After 18 years, it’s time to say goodbye to Chelsea. I arrived as a nine-year-old with a dream, and I leave as a man who’s lived that dream in ways I never imagined. This journey tested me, lifted me, and strengthened me. To every teammate, coach, staff member, and supporter, thank you for shaping me. I gave everything I had, and I’m proud of the person this club helped me become. To the young players: the path won’t always be smooth. But stay ready, stay positive, and keep your faith. God’s timing is always right. Thank you all, truly, with love and gratitude.

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Sic Parvis Magna @____BlackStone

19 days ago

Who to follow

usher fendi

@fendi_Usher

👽👽👻👻🎮🎮 #MUFC 🔴🔴 #GOD'SNOTDEAD

Edem🤲🏼

@Atsyor_Jr

Sports⚽️🏊‍♂️🎖 Music🎧 💙 @chelseafc fanatic💙

bismarkofosu

@ofosubismar

____BlackStone retweeted

LinkinForLife

@ForLinkin

20 days ago

9 years ago, this was my beginning. Today, it reminds me that progress takes time. Keep believing, keep pushing, and never give up. Your story is still being written. 🙏🏽🔥

ForLinkin's tweet photo. 9 years ago, this was my beginning. Today, it reminds me that progress takes time.
Keep believing, keep pushing, and never give up. Your story is still being written. 🙏🏽🔥 https://t.co/r9DBWFIUyc

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Chefabbys

@chefabbys

20 days ago

Fufu tastes better with palm nut soup than light soup but we are not ready for this conversation

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mr no-gbo-nothing @ehigbai_o

22 days ago

The sachetization of infidelity.

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Weffrey Jellington

@jeffwellz

22 days ago

This is not available in your location

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TheRunningMachine @Pk_Gyamfi

27 days ago

When the mind and body aligns nothing can stop it. The search for a new realm continues. #KKG #runningmachine #marathontraining #ultramarathontraining

Pk_Gyamfi's tweet photo. When the mind and body aligns nothing can stop it. The search for a new realm continues.

#KKG
#runningmachine
#marathontraining
#ultramarathontraining https://t.co/Zan7GkkCSr

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4k™ @geeblaq4k

30 days ago

" I haven't seen you since we graduated" Just give me your wallet and phone bro

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thousand. @oneman1000_

about 1 month ago

Yesu, medaase. ❤️ it’s my birthday, but i got you guys a gift. check this out —> https://t.co/s327yOuf1i

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Babygirl Lifestyle🥰 ❤️ @mhaamhe_adwoa

about 1 month ago

Ok. This is a cry for help. Please I need help with accommodation for a couple of months while I sort myself out. I renewed my rent in January and made part payment. There’s a balance I’m supposed to give my landlord and he’s been on my neck. Despite my pleas for an extension

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sedi🧘🏾 @bluegerberas

about 1 month ago

Like genuinely imagine asking your babe what he ate for lunch and he says kenkey. Immediate ICK

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shafman 🇵🇸🇸🇩 @yaron__zango

about 1 month ago

biggest new media company 🔥

____BlackStone retweeted

Kwadwo Sheldon

@kwadwosheldon

about 1 month ago

This is KSS!!!!!!!

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Faka001🦅

@Fakaofwest1

about 2 months ago

Refusing to shoot in America is crazy to me

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Sic Parvis Magna @____BlackStone

about 2 months ago

Konkonte vs Cocaine. A battle of two potent powders. Black Stars vs Columbia. Bronii bɛhu sɛ nnyɛ coke tipɛn ne Konkonte mmoaaa

____BlackStone retweeted

thousand. @oneman1000_

about 2 months ago

close mouths don’t get fed so here goes. i have to shoot a music video this month. i have the concept & team ready. i have raised some of the funds. i don’t have all the funds. need help. want to support? dm please, let me show you what is cooking! thanks!

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