Bank of Ghana acquires over 432,000 oz of gold

The Bank of Ghana (BoG) had acquired a total 432,358 ounces (oz) of gold from Ghana Chamber of Mines (GCM) members as of mid-December 2023, under the Domestic Gold Purchase Programme (DGPP) and voluntary forex sales initiative.

This is equivalent to about 84 percent of the Bank’s planned purchases in 2023, and nearly 15 percent of members’ planned output in 2023, according to GCM.

BoG’s gold purchases are primarily aimed at alleviating depreciation of the local currency and its knock-on effect on inflation.

The Chamber’s president, Joshua Mortoti, noted that this is in line with the commitment of GCM’s producing members to help government’s efforts to speed-up the economy’s recovery.

The Chamber, he added, is in the process of collating members’ planned gold sales to BoG for 2024, and will facilitate the signing of bilateral agreements between the central bank and mining companies after targets are finalised.

Mr. Mortoti was speaking at a breakfast meeting with the Minister of Lands and Natural Resources – organised by the Chamber in Accra, and also stated that: “In the same vein, members continued to voluntarily give the Bank of Ghana first option to buy forex they intend to sell for the local currency”.

The DGPP was announced in 2021 by government to enable BoG have the first right of refusal for all gold mined in the country. It is part of the central bank’s plan to build gold reserves to stabilise the cedi.

The decision was also against a background that the central bank had only 8.7 tonnes of gold reserves at end-2021, despite the country being one of the world’s leading gold producers.

Announcing the policy decision of the time, Vice President, Dr. Bawumia Mahamudu said: “The central bank will purchase the gold at world market prices and mining companies will export the portion that is not purchased by BoG. Ultimately, once we accumulate enough gold; future borrowing and our currency can be backed by gold. This will stabilise the cedi long-term.

“We must also deepen our industrialisation through value addition to gold; even though Ghana has two gold refineries, neither has London Bullion Market Association (LBMA) certification. This limits our full participation in the gold value chain. We will urgently work toward LBMA certification for our refineries over the next few years,” he added.

Also speaking at the breakfast meeting, Minister of Lands and Natural Resources Samuel Abu Jinapor said he continues looking forward to support from the Chamber for various interventions being implemented by government – including value addition, local content and participation, as well as development of mining communities.

He said: “Together, we will achieve the President’s vision to make Ghana the mining hub of Africa.

“The ministry remains fully committed to effective and efficient utilisation and management of our country’s natural resources, anchored on transparency, integrity and utmost good faith for the Ghanaian people’s benefit,” he added.