Vice President Dr Mahamudu Bawumia has advocated using gold as a cornerstone to support the Ghanaian Cedi and proposed a new foreign exchange management framework.
At the Royal Gold Ghana Limited (RGGL) inauguration on August 8, 2024, Dr Bawumia emphasized that gold could be a reliable anchor for the Cedi’s value, enhancing currency stability and economic resilience.
Dr Bawumia outlined a plan to channel significant gold demand through the Bank of Ghana’s (BoG) gold purchase program. His proposal involves using the BoG’s gold reserves to meet forex demand.
For instance, if GH₵3 billion in foreign exchange is needed, the BoG could convert that amount into gold and provide the necessary forex, thus stabilizing the exchange rate through controlled demand and supply dynamics.
Dr. Bawumia’s vision is to harness Ghana’s substantial gold reserves to ensure long-term exchange rate stability and foster robust economic growth, a prospect that holds great promise for the nation’s economic future.
He believes the country can better manage foreign exchange needs by anchoring the Cedi to gold while expanding reserves for other national priorities.
Governor Dr. Ernest Addison also underscored RGGL’s pivotal role in bolstering the BoG’s Domestic Gold Purchase Programme (DGPP), instilling confidence in the program’s potential for success.
He highlighted that since the program’s inception, the BoG has accumulated 65.4 tons of gold valued at US$5.07 billion.
This year alone, the Bank has purchased 23 tons of gold valued at approximately US$1.8 billion, bolstering its position to meet external payment obligations.
Dr. Addison underscored the immense potential of gold as Ghana’s leading export commodity, with projected earnings for 2024 estimated at close to US$10 billion, a figure that promises a bright economic future for the country.
Despite a long history of gold exportation, gold’s full local economic potential has yet to be realized.
The new refinery is expected to drive value addition, economic growth, job creation, and poverty reduction.
The establishment of RGGL is poised to enhance gold beneficiation and reduce smuggling by providing a reliable market for artisanal and small-scale miners.
Dr Addison noted that achieving the London Bullion Market Association’s (LBMA) Good Delivery List accreditation will further reduce the Bank’s dependence on foreign refineries and expand its gold reserves.
Dr Addison also commended RGGL’s launch, highlighting its alignment with BoG’s objectives to stabilize the economy and achieve price stability.
He encouraged all stakeholders to support the refinery and collaborate to advance Ghana’s gold industry, adding value to national resources and building a prosperous future.
