Vice President Dr. Mahamudu Bawumia has announced a plan to link the Cedi’s value to gold in order to protect the local currency from depreciation and handle ongoing FX challenges.
He explained that this has become necessary due to the successful implementation of the gold purchase program.
So far, the Bank of Ghana has acquired 65.4 tonnes of gold valued at US$5 billion as part of efforts aimed at boosting Ghana’s gold reserves.
Dr. Bawumia, who is the presidential candidate of the New Patriotic Party (NPP), disclosed this at the commissioning of the Royal Ghana Gold Refinery in Accra on Thursday, August 8, 2024.
“I would like to propose a new foreign exchange regime management architecture for Ghana next year in which the value of the cedi with everything we have put in will be anchored to gold. I want us to move our foreign exchange management because we need an anchor and I believe that the best anchor for the Cedi is gold. I want us to anchor the Cedi to gold.
“I am proposing a framework which we will discuss with the central bank, of course, and we will see where. But the framework that I am proposing is very simple. Having looked at all that we have done, all significant demand for gold should be channelled through the Bank of Ghana’s gold purchase programme.
“If you have GHȼ3 billion and you are looking to buy forex, the Bank of Ghana can take the GHȼ3 billion and buy gold and give you your forex. Demand equals supply, exchange rate doesn’t move.
“It is just a simple use of our gold reserves to meet the demands of forex. Once you can anchor the Cedi with gold so that you are able to meet demand then there are so many extra forex reserves to do other things for the country.
“But then you will maintain long-term exchange rate stability, which will be anchored on gold and then we will move forward,” the Vice President said.
About the Refinery
The company was established through a partnership between the Government of Ghana through the Bank of Ghana and Rosy Royal Minerals Limited.
It is a state-of-the-art refinery equipped with cutting-edge technology, able to refine gold to 24 carats, 99.99% purity—same quality as a gold delivery bar (LBMA standard), significantly boosting our capacity to locally process gold and increase value-added prospects.
The refinery will employ 80–120 people directly and create 500 indirect jobs.
By: Rainbowradioonline.com/Ghana
