Ghana Starts Gold Purchase Program to Strengthen Currency

SEATTLE (Scrap Monster): The West African nation, Ghana, announced that it has commenced a bulk gold purchase program, aimed at strengthening the country’s falling currency.

The local gold purchase program will raise the gold component of its total Central Bank reserves. According to Ernest Addison, Governor, Central Bank, the attempt is to strengthen the cedi currency without increasing inflation.

Despite the government’s efforts to contain price hikes, the consumer retail inflation in the country surged to hit an 18-year record of approximately 24% in the month of April this year. During the initial quarter of 2022, the Ghana cedi reported notable depreciation in value against dollar, along with Russian ruble. The value of the currency had stabilized during the beginning of Q2, but had again witnessed steep decline over the previous week.

By exploring bulk purchases of locally produced gold, the Bank of Ghana targets to boost economy and shore up the value of its currency. Furthermore, it will provide big boost to artisanal small scale mining, which accounts for almost half of Ghana’s total gold production.

Incidentally, Ghana is the largest gold producer in Africa, having overtaken South Africa in 2019. Mining and gold are essential to the country’s economy and tax base. Also, gold contributes over 90% of Ghana’s total mineral exports.

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