Africa’s biggest gold producer empowers new Gold Board with $430 million to lock in domestic bullion reserves

The funding, approved by Parliament, transfers responsibility for financing the government’s domestic gold purchase programme from the Bank of Ghana to the state, with the newly established Ghana Gold Board (GoldBod) taking charge of the programme.

The change is intended to bolster Ghana’s foreign exchange reserves and support the cedi by increasing the country’s gold holdings. It also forms part of broader efforts to retain more value from Ghana’s position as Africa’s leading gold producer.

Until now, the central bank had led Ghana’s domestic gold purchase programme, using locally sourced bullion to diversify reserves away from traditional foreign currencies.

The strategy has gained traction as gold prices have climbed to record highs, helping improve the country’s reserve position and providing additional support for the cedi during periods of market volatility.

A stronger reserve strategy with higher fiscal exposure

Under the new arrangement, however, the financial burden shifts to the government’s balance sheet.

The 5 billion cedi allocation will finance GoldBod’s purchases from domestic producers, replacing the central bank as the primary financier of the programme.

While officials expect the move to expand Ghana’s gold reserves and strengthen external buffers, it also introduces new fiscal obligations at a time when the country remains under an economic reform programme backed by the International Monetary Fund.

Analysts say the shift could expose public finances to greater risk if gold prices decline sharply or if the programme requires additional government borrowing. Unlike the central bank, which could absorb such operations within its balance sheet, state-funded purchases could have a more direct impact on Ghana’s fiscal position.

The government nonetheless argues that the benefits outweigh the risks.

By centralising gold purchases under GoldBod and increasing domestic acquisitions, Ghana hopes to further strengthen its foreign exchange reserves, stabilise the cedi, improve investor confidence and retain a larger share of the value generated by its gold industry.

Source: africabusinessinsider