Over $5bn worth of gold reserve realised under domestic gold purchase programme – BoG

• Aug 9, 2024

The Bank of Ghana (BoG) has announced that over $5 billion worth of gold reserve has been accumulated so far under the Government’s Domestic Gold Purchase Programme since the inception of the programme in 2021.

The total gold reserve build-up was 65.4 tonnes as of December 2023.

However, the Central Bank purchased an additional 23 tonnes of gold between January and June this year, estimated at $1.6 billion, bringing the country’s total gold reserves to 73 tonnes.

Out of the figure, the Central Bank used $1.6 billion as equity in the Government’s ‘Gold for Oil’ initiative to help stabilise the Cedi and halt the increasing rate of foreign currencies.

This came to light during the official commissioning of the Royal Gold Ghana Limited (RGGL), a joint venture gold refinery, by the Vice President, Dr Mahamudu Bawumia, in Accra on Thursday.

The RGGL is a joint venture between the Precious Minerals Marketing Company (PMMC) and Rosy Royal Limited, an Indian gold refinery firm.

At a colourful ceremony to unveil the $450 million gold refinery, Vice President Bawumia lauded the Board, Management, and staff of the PMMC and RGGL for the successful construction of the gold refinery.

Dr Bawumia said his administration would develop a policy framework to anchor the country’s local currency with gold to fortify it against the foreign forex.

“It gives me great joy to address you today on the commissioning of the Royal Ghana Gold Refinery.

“This historic achievement in the natural resources sector, specifically in gold, marks a significant milestone in Ghana’s journey towards economic transformation and industrialisation,” Dr Bawumia said.

The new facility, he said, was a testimony to the Government’s commitment to adding value to the country’s natural resources, creating jobs, and ensuring sustainable economic growth.

The Vice President said the partnership between the Government, through the BoG, and Rosy Royal Limited, symbolised a vision for a prosperous future in the precious minerals industry.

The state-of-the-art refinery is equipped with cutting-edge technology that meets international standards, thus significantly boosting the country’s capacity to locally process gold and increase value-addition prospects.

It is expected that after operating for three years, the RGGL will receive London Bullion Market Association (LBMA) accreditation.

However, before the LBMA accreditation would be issued, the refinery must purchase all its gold dore from responsible sources.

Ghana has been exporting her gold in raw form for over a century, thus, missing out on significant revenue and job creation opportunities.

The Vice President said the Akufo-Addo-led Government was determined to make value addition a critical component of the country’s export strategy.

“The launch of this refinery is particularly important as it realises a key part of this vision.

“Originally, this vision was to be actualized through a joint venture between the PMMC and RGGL, the PMMC granted part of its land for the construction of the refinery.

The construction of the gold refinery started in 2018 and was completed in 2022.

“I commend the Board, Management and Staff of both the Bank of Ghana and PMMC for their relentless support and cooperation in seeing to the fruition of this historic national project.

“The establishment of this refinery is a strategic investment which contributes immensely to Government’s efforts in ensuring value addition of our mineral resources,” Dr Bawumia stated.

Currently, Ghana exports her gold in dore form, resulting in loss of revenue and missing opportunities for job creation. It has been established that between 2018 and 2023, Ghana’s average annual gold production was 3.92 million ounces (122.5 tonnes).

All the gold was exported unrefined, resulting in lost revenue, and missed job creation opportunities.

The refinery will offer a premium to gold exported from Ghana.

The refinery is expected to create between 80 to 120 direct jobs and another 500 indirect employment opportunities.

This will boost domestic tax revenue in the form of corporate taxes and enable the nation to refine gold to 24 carats, 99.99% purity – the same quality as a good delivery bar (LBMA standard).

The Vice President stated that with the ability to locally refine gold, Ghana can sell the refined gold at its appropriate price, thus, enabling her to retain its economic value.

In addition, he said, government’s intention to refine all gold produced in Ghana would further enhance the country’s economic independence and resilience.

“With the BoG’s domestic gold purchase programme (DGPP), which started in 2021 and the refinery, we are positioning Ghana as the gold hub of Africa,” Dr Bawumia pointed out.

“This marks a new era for Ghana and ushers us into our vision of building a resilient economy anchored on our mineral resources in a golden age of natural resource governance,” he added.