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Vice President Dr. Mahamudu Bawumia, the New Patriotic Party’s (NPP) flagbearer, has highlighted the significant impact of the Gold for Oil programme on Ghana’s economy. He emphasized that the initiative played a crucial role in preventing the economy from collapsing. “Without the gold purchase programme and the Gold for Oil programme, this economy would have collapsed,” Dr. Bawumia stated during a media briefing on Sunday, August 25.
The Governor of the Bank of Ghana (BoG), Dr. Ernest Addison, also voiced his support for the continuation of the Gold for Oil programme. He described it as an innovative measure introduced to navigate a challenging economic period. However, Dr. Addison mentioned that the central bank is considering transferring the programme to a commercial bank. “It is a programme that we recommend to continue because it helped us in the period of crisis,” he said, adding that the move would allow the BoG to focus more on its core responsibilities.
When questioned by Buem lawmaker Kofi Adams during a Public Accounts Committee meeting on Monday, April 8, Dr. Addison confirmed his earlier position that the programme would be gradually phased out but clarified that it should still be pursued. He emphasized the need for a commercial bank to take over to enable the central bank to concentrate on its operations. “We only want to make sure that this is done by a commercial bank so that we can have time to focus on our operations as a central bank,” Dr. Addison explained.
Dr. Addison also elaborated on the broader impact of the Gold for Reserves programme, assuring the committee that the BoG’s gold holdings would see a significant increase by next year due to this initiative. He noted that while the full benefits of the programme have yet to be realized, its commencement in 2022 marked a crucial step toward strengthening the country’s reserves.
In July 2021, the BoG launched a Gold Repurchase Programme aimed at doubling its gold holdings within five years. At the programme’s launch, Governor Addison pointed out that despite the growth of the Bank of Ghana’s foreign reserves to nearly US$11 billion over the past fifteen years, the portion of gold reserves had remained static. He compared this with other industrialized countries, such as those in the Eurozone and the USA, which have continued to maintain substantial gold reserves.
According to Dr. Addison, Ghana, despite being the largest gold producer in Africa and the seventh-largest in the world in 2019, has not significantly increased its gold reserves in recent years.
He cited a World Gold Council report showing that other central banks, particularly from emerging markets, had bolstered their gold reserves during the pandemic, with countries like Turkey, India, and Russia leading the way. In contrast, Ghana added nothing to its gold reserves during that period, underscoring the need for strategic initiatives like the Gold for Oil programme.
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