The Bank of Ghana has launched a programme to purchase gold domestically to help shore up the country’s foreign reserves. According to the Governor of the Central Bank, Dr Ernest Addison, the move will enable the Bank of Ghana (BoG) to purchase gold from selected local aggregators and mining firms and pay in the local currency at the prevailing market price.
The move, according to the Governor, will double the country’s gold holdings in the next five years from 8.7 tonnes to 17.4 tonnes, the Governor said. “Other than the diversification benefits of gold for our reserves portfolio, the domestic gold purchase programme will pave the way for BOG to grow its foreign exchange reserves to foster confidence, enhance currency stability, create a more attractive environment for foreign direct investments and economic growth. This programme will also enable the Bank to leverage its gold holdings to raise cheaper sources of financing to provide short-term foreign exchange liquidity,” Dr. Addison said. He said the Bank had engaged domestic mining firms in collaboration with the Ghana Chamber of Mines to buy refined gold from their refineries.
So far, only one gold aggregator has been selected for the programme after independent due diligence was conducted. However, in the near term, other gold aggregators will be eligible to participate in the programme once a roadmap is developed to ensure they meet the governance, risk, compliance and supply chain requirements.
The Governor said the domestic purchasing programme had the potential to improve the small-scale gold mining sector by ensuring they receive a fair purchasing price for their gold, provide an incentive to formalise and move away from damaging environmental and social practices.
