By Sammy Gyamfi
Under the Gold for Reserves programme, 20% of the gold output of seven large scale mining companies in Ghana, is bought by the BoG in a form of bullion (refined gold) outside the country. The physical gold (bullion) is then added to BoG’s reserves at the Bank of England.
It is instructive to note that before 2022, Ghana had a little over eight tonnes of gold reserves at the Bank of England. This clearly shows that, gold reserve accumulation by the BoG was not introduced by Bawumia as the NPP and their media surrogates will have us believe. BoG was accumulating gold reserves long before Bawumia became Vice President.
Through the G4R program explained above, the erstwhile NPP government increased the country’s gold reserves from 8 tonnes to 30 tonnes by the end of 2024. That’s factual.
That physical gold (bullion) reserves is still intact at the Bank of England. It hasn’t been liquidated to shore up the cedi. Rather, it is increasing on account of the continuation the G4R program by the new BoG administration under this NDC/Mahama government.
As we speak, BoG continues to buy 20% of gold produced by seven large scale mining companies in a form of bullion (refined gold) to shore up the country’s gold reserves.
This government has in just four months, added more than one tonne to the gold reserves of the country since January 2025.
In fact, as part of its mandate to support gold reserve accumulation by the BoG, the GoldBod has secured an agreement with nine additional large scale companies to sell 20% of their output to the GoldBod. This will further enhance gold reserve accumulation by the BoG.
But this physical gold reserve is not the main reason why the cedi is appreciating; for gold reserves is not the same as forex liquidity.
Forex liquidity from gold is generated through the Gold for Forex (G4FX) programme. This is different from the Gold For Reserves (G4R) programme.
Under the G4FX programme, cedis are advanced by the BoG to the GoldBod, which was formerly the Precious Minerals Marketing Company. .
This cedis are raised by the BoG mainly through their Forward FX Auction programme.
The PMMC/GoldBod then disburses the amount in cedis to its selected aggregators for the purpose of purchasing small-scale gold.
The purchased small-scale gold is assayed and exported by the PMMC/GoldBod for and on behalf of the BoG to off-takers, who pay US dollars for the gold into BoG’s account.
That dollars paid to the BoG is partly injected into the market (to Banks, Bulk Oil Distribution Companies etc.) and partly use to settle government obligations. What is left, goes to shore up the country’s foreign reserves.
Our foreign reserves has gone up significantly because of the unprecedented volumes of gold purchased and exported by the PMMC/GoldBod under the G4FX program and not the G4R program.
And this because of the deliberate policy choices of the NDC/Mahama government.
Clearly, the NPP does not understand these two different programs (G4R and G4FX) hence their confusion.
