BoG must sustain gold reserves drive towards economic stability
The news that the Bank of Ghana’s (BoG) gold reserves have significantly improved and more than tripling since 2023, is indeed refreshing.
This is an encouraging development for both the business community and the wider Ghanaian economy.
The Ghanaian Times in the Thursday, May 8, 2025, edition, has reported that the BoG’s gold reserves increased from 8.7 tonnes in May 2023 to 31.7 tonnes as of April, this year.
This represents a remarkable 264.4 per cent increase over the two-year period, underscoring the Central Bank’s strategic efforts to shore up Ghana’s foreign exchange reserves and enhance macro-economic stability.
The gold reserves accumulation follow the launch of the Domestic Gold Purchase Programme in July, 2021, by the then Governor of the BoG, Dr Ernest Addison.
The initiative, which forms part of the BoG’s broader Gold Reserves Programme, is to diversify the BoG’s asset portfolio, support the local currency, the Cedi, and reduce Ghana’s overreliance on the US dollar and other foreign currencies.
Gold, traditionally regarded as a store of value, is widely used by central banks across the world as a buffer against inflation and currency depreciation.
It is not different in Ghana’s case, and by increasing its gold holdings, the BoG is helping to stabilise the Cedi, reduce exchange rate volatility, and improve investor confidence in the economy. Increased gold reserves strengthen the credibility of the national currency by backing it with a valuable and tangible asset.
Moreover, it serves to diversify Ghana’s foreign reserves, reducing exposure to external shocks stemming from fluctuations in major international currencies such as the dollar.
The strategic importance of this policy became evident during the 2022 economic crisis when Ghana faced acute foreign exchange constraints.
At the time, some international companies could not repatriate their profits in dollars due to the country’s limited forex reserves. It was gold that provided a crucial buffer, allowing Ghana to navigate that turbulent period.
While The Ghanaian Times commend the BoG for its foresight and consistency in implementing this critical programme, it is hoped that the initiative is sustained, under the current BoG Governor, Dr Johnson Pandit Asiama.
Too often in Ghana, important programmes are abandoned with changes in leadership, resulting in waste and stalled progress.
The decision by the BoG to purchase gold locally is apt. It is not only expected to strengthen the domestic mining sector and promote formalisation, but help retain more value within the country instead of exporting raw gold with minimal benefits to the economy.
Already, the BoG’s gold policy is yielding results at a time when the Cedi is being recognised as one of the best-performing currencies in the world, according to global credit rating agencies.
This is not mere coincidence, but as a result of deliberate monetary policy choices that must be sustained and strengthened.
That explained that, while we consider the BoG’s efforts as prudent, we urge greater transparency in the implementation of the gold reserves purchase policy.
It is important for the BoG to regularly publish not only the volume of gold reserves acquired, but also the cost of these purchases. We acknowledge that the funds used in purchasing the gold come from the Bank’s approved budget, but openness in such national undertakings promotes trust and enhances accountability.
We encourage the BoG to maintain the momentum and continue to explore innovative measures in order to stabilise the Cedi.
Furthermore, currency instability remains a significant concern for the business community, as it increases the cost of doing business and surges inflation. When importers require more Cedis to obtain foreign currencies, prices inevitably go up, affecting every Ghanaian.
The BoG’s gold reserves policy is a bold and commendable step towards strengthening Ghana’s economic foundation. It is worth sustaining for the long-term benefit of the country.
