Professor of Economics and Finance at the University of Ghana Business School, Godfred Alufar Bokpin believes the new Bank of Ghana Gold Coin initiative is a mere creation to clean a mess the Central Bank itself has orchestrated.
The Central Bank on Friday, September 27, 2024, launched the Ghana Gold Coin initiative as an investment opportunity where Ghanaians can invest in Gold Coins as a store of value.
Governor Dr. Ernest Addison says this policy is primarily aimed at mopping up excess liquidity in the system to control inflationary pressures.
But speaking exclusively to The High Street Journal, Prof. Bokpin argued that the monetary policies of the Central Bank are not working as expected hence the introduction of the new policy to support the existing ones.
He again argues that the excess liquidity in the system, admitted by the Governor, was created by the Bank of Ghana itself through the Gold for Oil Policy.
The Economist explains that the Gold for Oil Policy which enabled the Central Bank to purchase locally mined gold from local producers with the local currency has ended up pumping so much Ghana cedis into the system hence creating excess liquidity.
To him, the domestic gold purchase is a “negative sum game” which has rendered the tight monetary policy ineffective.
He therefore contends that the new Ghana Gold Coin initiative is a turnaround policy to clean a mess created by the same Central Bank.
“You know the Gold for Oil? You know how Bank of Ghana has been paying for it? They have been paying for it in cedis. It means that Bank of Ghana in the last couple of years that they have trumpeting Gold for Oil and Gold for Reserves, they are actually buying the gold in cedis. Bank of Ghana has ended up injecting so much cedis in the system. They are pumping cedis into the system while they are holding the Monetary Policy tight to mop up liquidity and introducing other measures. They have realized that all are not working.”
He added “you see what they are doing now. They are now introducing gold coins to mop excess liquidity that they themselves created.”
This situation, Prof Bokpin maintains is a clear testament to the lack of critical and proper analysis and evaluation of policies before implementation in Ghana.
He maintained that, “in Africa, and Ghana for that matter, we don’t take our time to analyze policies. We jump on something and we hurriedly implement it only creating problems along the way.”
