Way forward for Gold-for-Reserves
The Bank of Ghana (BoG) Governor’s call for collective action to reform the Gold-for-Reserves (G4R) programme represents a crucial moment for Ghana’s economic management.
With cumulative losses exceeding GH¢7.1 billion since 2021, the urgent need for this reform cannot be overstated.
However, as Dr Johnson Pandit Asiama rightly emphasised, the focus must shift from blame to constructive transformation.
The G4R programme was conceived during a period of acute economic vulnerability, when Ghana’s foreign exchange reserves were under severe pressure and the cedi faced relentless depreciation.
The strategic reason behind using domestic gold to boost reserves remains sound: Ghana produces significant quantities of gold, and channeling this resource toward national economic stability makes inherent sense. The challenge lies not in the concept but in the execution.
The staggering acceleration of losses from GH¢744 million in 2022 to GH¢1.8 billion in 2024 under G4R alone signals fundamental flaws in the programme’s operational framework.
The Governor’s acknowledgment that the BoG has absorbed the inherent costs of the trading model since inception reveals a structural weakness that demands immediate attention.
No central bank should routinely bear such substantial costs from what is essentially a fiscal policy instrument.
The distinction Dr Asiama draws between G4R and the now-defunct Gold-for-Oil programme is instructive.
While the latter was cancelled due to inefficiencies, G4R serves the fundamental purpose of reserve accumulation, a core mandate of any central bank.
This distinction justifies continued operation, but only if meaningful reforms are implemented swiftly.
The Graphic Business believes several critical reforms warrant immediate consideration. First, the Ministry of Finance (MoF) must fulfill its budgetary commitments.
The allocation of $270 million in the 2025 budget, with no disbursement as of September, is unacceptable. If this is a government policy programme, the fiscal authorities must bear the costs transparently within the national budget rather than leaving them on the central bank’s balance sheet.
Second, the trading model itself requires fundamental restructuring. The external audit expected in March must provide clear recommendations on operational efficiency, pricing mechanisms, and risk management protocols. Parliament and the MoF should commit to implementing these recommendations promptly.
Third, transparency must be enhanced significantly. The concerns raised by the Public Accounts Committee (PAC) reflect broader public anxiety about how taxpayer resources are being managed.
Regular public reporting on the programme’s operations, costs, and benefits would strengthen accountability and public confidence.
Fourth, coordination between the BoG, MoF, and mining sector stakeholders must improve dramatically. The programme’s intersection with responsible mining policies and efforts to formalise small-scale mining presents opportunities that require integrated approaches rather than siloed implementation.
The paper seconds the Governor’s call for unity rather than recrimination. Ghana’s economic challenges demand that institutions work collaboratively toward shared national objectives.
However, unity cannot mean absence of accountability. The reforms must be substantive, measurable and time-bound.
The G4R programme can serve Ghana’s economic stability if reformed properly. The alternative which is allowing losses to continue mounting while institutional capacity erodes is untenable.
Parliament, the Executive, and the BoG must act decisively to ensure this strategic initiative delivers its intended benefits to the Ghanaian people.