Dr. Daniel Amateye Anim, the Chief Economist at Policy Initiatives for Economic Development (PIED Africa), has urged the government to align Ghana’s “gold for forex” policy with other economic policies to ensure it achieves its full potential. According to Dr. Anim, while the “gold for forex” policy is a crucial step towards stabilizing the country’s exchange rates, its effectiveness will be significantly enhanced if it is complemented by other growth-driven policies.
Dr. Anim in an interview with The High Street Journal, emphasized that other policies that promote growth within Ghana’s domestic economy, as well as adding value to its products and services, will help attract inflows and drive overall economic growth. He noted that the policy should not function in isolation. “If the policy is a stand-alone policy, it will defeat its purpose, but rather the policy must be aggressively pursued along with complementary policies to minimize the depreciation of the cedi,” he said.
One of the complementary strategies Dr. Anim mentioned includes making made-in-Ghana products and services more attractive and affordable for citizens, which would contribute to macroeconomic stability. He believes that by supporting local industries and enhancing the competitiveness of Ghanaian goods, the country can bolster its economic resilience and reduce dependency on imports.
Speaking on the quantity of gold required for the policy’s success, Dr. Anim pointed out that Ghana must continue to accumulate gold until the policy’s intended purpose is achieved. He added that even after the policy’s goals are met, it should not be discontinued. Instead, it should be maintained and closely monitored to assess its long-term impact. “Ghana must continue to accumulate the gold until it’s achieved its intended purpose,” he advised, adding that the country should study and analyze the policy over time to determine its future direction.
Since its inception, the Bank of Ghana (BoG) has accumulated approximately 10 tonnes of gold under the “gold for forex” policy and has set a target of 17.4 tonnes by 2026. The BoG acquires gold from both small-scale and large-scale miners within Ghana. However, ensuring a consistent supply of high-quality gold from local miners and maintaining the value of gold reserves amidst global price fluctuations present significant challenges.
Dr. Anim also highlighted potential challenges associated with the policy, including the volatility of global gold prices, which could impact the value of Ghana’s reserves in the future. He emphasized that these challenges must be managed carefully to ensure the long-term success of the policy.
The “gold for forex” policy, launched in 2021, is part of a broader strategy to build Ghana’s gold reserves, stabilize the cedi, and strengthen the country’s balance of payments. The New Patriotic Party (NPP) Flagbearer, Dr. Mahamudu Bawumia, has pledged to fully institutionalize the programme if elected.
