The Bank of Ghana’s newly-introduced gold-purchasing programme will bolster Ghana’s gold production value chain in a transformational way, President Nana Akufo-Addo has said.
Swearing in the newly-constituted board of directors of the Bank of Ghana at the Jubilee House on Friday, 20 August 2021, President Akufo-Addo said: “I have, for decades, been baffled by the fact that our nation, which has been for generations, one of the leading producers of gold in the world, has never instituted a domestic gold-purchasing programme to develop the domestic gold production value chain”.
“Hence, the transformational nature of the recent gold-purchasing programme introduced by the Bank”, he noted.
“It has opened up the entire value chain with the imminent completion of a Ghanaian gold refinery”, added President Akufo-Addo.
This development, he said, “will allow us to add value to our gold and establish transparency in the small-scale gold mining industry in Ghana”.
Ghana’s central bank will purchase 8.7 tonnes of domestically-mined gold over the next five years to bolster its foreign currency reserves, Governor Ernest Addison revealed last month.
Africa’s top gold producer is weathering its steepest decline in production since 2004 after the COVID-19 pandemic disrupted global supply chains.
The bank hopes the gold purchases will help it raise cheaper sources of financing to provide short-term foreign exchange liquidity.
“This day is, indeed, historic because it marks the first time the Bank of Ghana is embarking on domestic gold purchasing to augment our foreign reserves with a view to doubling our gold holdings,” Dr Addison said in a speech.
The country’s foreign reserves have steadily grown over the last 15 years to just under $11 billion but gold reserves have been unchanged over the same period, according to central bank figures.
An initial 540 kg of gold will be purchased over the next year from domestic mining firms and small-scale miners, Addison said, with the goal of acquiring 8.7 tonnes by the end of 2026.
The Bank of Ghana will pay for the gold in local currency at prevailing market prices, he said.