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Vice President Dr. Mahamudu Bawumia has proposed anchoring the value of Ghana’s currency, the Cedi, to gold as a strategic measure to stabilize the currency and address ongoing foreign exchange challenges. This proposal follows the success of the Bank of Ghana’s domestic gold purchase programme, which has significantly bolstered the country’s gold reserves, now totaling 65.4 tons and valued at US$5 billion.
Speaking at the inauguration of the Royal Ghana Gold Refinery in Accra, Dr. Bawumia outlined a new foreign exchange management policy aimed at ensuring long-term stability for the Cedi. He emphasized that anchoring the Cedi to gold could serve as a reliable mechanism to curb depreciation.
“I want us to move our foreign exchange management because we need an anchor, and I believe that the best anchor for the Cedi is gold,” Dr. Bawumia stated, suggesting that significant demand for gold be routed through the Bank of Ghana’s gold purchase programme.
Under the proposed framework, individuals or institutions seeking to purchase foreign exchange would instead have their Cedi funds converted into gold by the Bank of Ghana, which would then provide the equivalent foreign exchange. This approach, according to Dr. Bawumia, would help maintain a stable exchange rate by aligning supply with demand.
The Vice President’s remarks come in the context of ongoing challenges with the Cedi, which has depreciated by 19.6% against the US dollar as of July 2024, according to the Bank of Ghana. By backing the Cedi with gold, Dr. Bawumia aims to create a more stable and resilient currency, contributing to broader economic stability in Ghana.
