Bank of Ghana has launched a domestic gold purchase programme to help shore up the country’s foreign reserves. The move will enable the Bank of Ghana (BoG) to buy gold from selected local aggregators and mining firms and pay in the local currency at the prevailing market price. The Bank hopes to double its gold holdings in the next five years from 8.7 tonnes to 17.4 tonnes. It would allow the BoG to grow its foreign exchange reserves to foster confidence, enhances currency stability, creates a more attractive environment for foreign direct investments and economic growth. The programme would also enable the Bank to leverage its gold holdings to raise cheaper sources of financing to provide short term foreign exchange liquidity.
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 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. It would also lead to a route to formalise and improve ability to sell into formal gold markets and thereby reduce their vulnerability to illegal actors in the domestic and international gold supply chains.