As debate intensifies over the Bank of Ghana’s decision to offload 50% of the country’s gold reserves, natural resource governance expert Dr. Steve Manteaw believes the central bank made an economically wise decision.
Amid the criticisms and the intense polarised debate, Dr. Manteaw insists that selling gold when prices are high is not a mistake; it is sound economics.
According to Dr. Manteaw, the decision should be understood as a balancing act, not a loss. For him, the country cannot sell its gold and cry later due to low prices. The reserves, he argues, are sold when prices are good and stocks rebuilt when prices are low.
“I have always known that, it is economically prudent to sell off some of the country’s gold stock when prices are high, rather than when they are low,” he explained.
In his view, this is simply how countries protect themselves against sharp swings in commodity prices.
A Hedging Strategy
Dr. Manteaw explains that gold, like oil or cocoa, is a volatile commodity. Prices rise and fall, sometimes sharply. A smart country, he says, does not sit on all its stock waiting for the market to turn against it.
By selling part of the reserves when prices are high, Ghana is effectively locking in value and converting it into foreign exchange that can support the economy, which the experts explain as diversification.
“It’s simply about hedging against commodity price volatilities,” he further argued. “If you don’t find the gold in bars, you’ll find it in forex reserves. We stockpile when the price is low and sell when it’s high. It’s a balancing act,” he added.
In other words, the wealth has not disappeared; it has only changed form.
Lessons from Cocoa and a Missed Opportunity
To drive his point home, Dr. Manteaw draws a powerful historical comparison with cocoa. He argues that Ghana could have applied the same strategy decades ago if the cocoa silos built under Kwame Nkrumah in Tema had not been abandoned after his overthrow.
With proper storage, Ghana could have stockpiled cocoa when prices collapsed and released it onto the market when prices surged.
That, he says, would have protected farmers, stabilised earnings, and reduced the country’s exposure to price shocks.
The same logic, he insists, applies to gold today.
He said, “We could have done the same with our cocoa if Kwame Nkrumah’s silos in Tema had not been abandoned after his overthrow. We simply would have sold the bulk of our cocoa when the price is good and stockpiled when the price collapsed.”
A Warning Against One-Sided Narratives
Dr. Manteaw also cautions against what he describes as alarmist commentary that focuses only on the reduction in physical gold holdings while ignoring the broader balance sheet.
Looking only at the gold bars, he argues, misses the bigger picture. What matters is the total value of national reserves, whether held in gold or foreign currency. Selling high and buying low, he says, is a time-tested rule, not a reckless gamble.
“It’s, however, unfortunate that some alarmists are only looking at just one side of the balance sheet, and misleading the public,” he lamented.
The Bottomline
The policy analyst and the natural resource governance expert maintain that the Bank of Ghana’s move should be judged not by emotion, but by strategy.
Stockpile when prices are low. Sell when prices are high. Use the proceeds to stabilise the economy and rebuild reserves when conditions are favourable. It is about managing national wealth wisely in an uncertain global market.
