Bank Country Director lauds BoG’s domestic gold purchase programme

The World Bank has lauded the Bank of Ghana’s domestic gold purchase programme, which among others seeks to help shore up the country’s foreign reserves.

According to the central bank, the move will enable it buy gold from selected local aggregators and mining firms and pay in the local currency at the prevailing market price.

The bank said it hopes this novelty will double its gold holdings in the next five years from 8.7 tonnes to 17.4 tonnes, thereby growing its foreign exchange reserves to foster confidence, enhance currency stability, and create a more attractive environment for foreign direct investments and economic growth.

Speaking on the development, Pierre Laporte, Country Director for the World Bank, said “gold is one of the safest means of saving, and it is not unusual for countries to have gold reserves as part of their reserves. So I think it is a good initiative, and if you look at the evolution of prices of gold throughout the last 10 years, even from 2008 to now, I think it is a wise move.”

The Bank of Ghana said the programme will also enable it leverage its gold holdings to raise cheaper sources of financing to provide short-term foreign exchange liquidity, adding that it has engaged domestic mining firms in collaboration with the Ghana Chamber of Mines to buy refined gold from their refineries.

It further said the programme has the potential to improve the small-scale gold mining sector by ensuring the operators receive a fair purchasing price for their gold and are incentivised to formalise and move away from damaging environmental and social practices.