The Bank of Ghana (BoG) has announced the addition of 7.70 tonnes of gold to the country’s reserves, with the aim of increasing gold as an asset cover to provide additional buffers against future economic shocks.
This move is part of the central bank’s Domestic Gold Purchase Programme (DGPP), which seeks to double the gold reserves over a five-year period.
Speaking at the 2023 Gold Expo in Takoradi, Governor of the Bank of Ghana, Dr Ernest Addison, highlighted the progress made since the launch of the DGPP in June 2021.
He stated that the central bank has added over 7.70 tonnes of monetary gold to the reserves as of June 30, 2023.
With the spot price of gold estimated at $63,000 per kg, the value of the added gold could exceed $485 million. This brings the total gold in Ghana’s reserves to 16.47 tonnes.
Dr Addison also provided insight into the sources of the gold in the reserves, revealing that mining firms contributed approximately 80%, while the remaining 20% was sourced from the artisanal and small-scale mining (ASM) sector through an approved aggregator.
The Gold Expo, held under the patronage of the Ministry of Lands and Natural Resources, facilitated discussions and showcased success stories within the mining sub-sector.
It aimed to boost investor interest and promote responsible and safe mining practices.
Dr Addison expressed confidence in exceeding the target of doubling the central bank’s gold reserves by the end of the year, highlighting the organic growth of foreign reserves through the refining of purchased gold.
He also emphasized the potential of the DGPP to support price stability and the central bank’s liquidity management efforts.
Furthermore, the DGPP benefits the ASM sector by providing competitive prices for gold purchases.
Dr Addison outlined the responsible sourcing and due diligence framework developed by the BoG to promote responsible and sustainable mining practices.
The increased gold reserves not only diversify reserve assets but also improve risk-adjusted returns for the portfolio.
The central bank intends to leverage the gold holdings to raise funds at competitive terms for foreign exchange liquidity management, thereby catalyzing investments in the gold mining sector.
Governor Addison also highlighted the G4O initiative, which leverages the DGPP to support the importation of petroleum products by purchasing gold from licensed small-scale miners.
This initiative proved crucial during the recent economic crisis, facilitating cheaper fuel prices and easing inflationary pressures.
The Bank of Ghana’s gold reserves program showcases its commitment to strengthening the economy, promoting responsible mining practices, and leveraging gold as a strategic asset to support various sectors, contributing to Ghana’s economic growth and stability.