Joe Jackson, CEO of Dalex Finance, and Dr. Theo Acheampong, an economist and political risk analyst, have openly disagreed with the International Monetary Fund’s (IMF) caution regarding Ghana’s accumulation of gold reserves.
The IMF has advised against holding excessive gold as part of Ghana’s broader economic strategy aimed at boosting reserves and addressing the chronic depreciation of the Cedi.
During a recent discussion hosted by NorvanReports, Jackson pointed out that central banks in developed countries, such as the United States and the United Kingdom, maintain significant gold reserves.
He emphasized the performance of gold compared to the dollar, stating, “In the last 8 years, gold has outperformed the dollar by over 105%, so by holding more gold as our reserves, we will potentially be doing better than holding dollars as reserves.”
Jackson further illustrated his argument by noting the dramatic rise in gold prices, mentioning, “In December 2016, gold was at $1,146 per ounce and now the precious metal has crossed the $2,500 per ounce threshold. So I am not sure about the IMF’s caution against holding gold as reserves.”
He highlighted Ghana’s substantial gold endowments, estimated to be between $5 trillion and $10 trillion in value, asserting that this could significantly enhance the country’s economy and stabilize the Cedi if more gold is held as reserves.
Dr. Theo Acheampong supported Jackson’s perspective, stating, “It’s a reality that anytime there are challenges with the cedi, the Bank of Ghana has to burn its reserves to mitigate the run on the currency and support the currency. Hence when you have more gold, then you are able to fight or stabilize the currency, especially during a period of crisis.” He added, “I support calls to retain more of the gold we produce in Ghana and buying the gold to build reserves to bolster the cedi.”
The Governor of the Bank of Ghana, Dr. Ernest Addison, has described the innovative Gold for Forex (reserves) program as a transformative approach in the Central Bank’s foreign exchange management strategies.
According to Dr. Addison, the programme successfully raised $1 billion last year to support the Cedi. He noted, “This year alone, we have been ahead of our reserve target by almost $1 billion. So, we plan to continue with the Domestic Gold for Reserves Programme. And that should help in terms of building reserves going into 2024,” as reported by the Ghanaian Times.
