President of Africa Policy Lens, George Domfe, has raised concerns about the management of Ghana’s gold reserves, questioning the Bank of Ghana over what he describes as a potentially costly decision to sell a large portion of the country’s gold holdings.
Speaking on the Asaase Breakfast Show on Wednesday (11 March), Domfe said Ghana’s gold reserves had grown significantly in recent years following efforts by the central bank to strengthen the country’s foreign reserves under its programme with the International Monetary Fund.
According to him, Ghana’s gold reserves stood at about 8.78 tonnes in May 2023, but the central bank embarked on an aggressive gold purchasing programme which increased reserves to 30.5 tonnes by December 2024.
He said the accumulation of gold reserves was intended to boost Ghana’s external buffers and strengthen the country’s financial position.
“The Bank of Ghana started buying gold and by the end of 2024 we had about 30.5 tonnes in reserves. That was a significant improvement within about 18 months,” Domfe said.
However, he noted that a subsequent report from the central bank indicated that the country’s gold reserves had dropped sharply.
Domfeh said Ghana’s gold holdings had increased to over 38 tonnes, but later declined to about 18.6 tonnes, suggesting that nearly 19 tonnes of gold may have been sold.
“The only thing that will bring down your gold reserves is when you sell them. So you don’t need anybody to tell you that Bank of Ghana has sold around 19 tonnes of gold,” he said.
He questioned the rationale behind the move, explaining that the central bank had previously indicated that Ghana’s gold holdings were higher than those of comparable economies and therefore needed to be reduced.
Domfe said the issue has now become more concerning following a new policy proposal indicating that Ghana intends to buy three tonnes of gold every week, which could translate into roughly 12 tonnes per month.
According to him, the price difference between the earlier sale and the proposed purchases could have significant financial implications.
He argued that if the gold was sold at around $3,500 per ounce and is now being repurchased at approximately $5,500 per ounce, Ghana could lose about $1.2 billion when replacing the quantity previously sold.
“That raises suspicion. By the time the country buys back the 19 tonnes that were sold, we could be losing about $1.2 billion,” he said.
Domfe said Africa Policy Lens has invoked the Right to Information Act to request details from the Bank of Ghana regarding the structure of the transaction.
He said the think tank wants clarification on whether the gold was sold outright or through financial instruments such as swaps, leasing arrangements or buyback agreements.
“If it was structured through swaps or other financial instruments, it could change how we interpret the situation,” he explained.
Domfeh added that the group would consider legal action if the central bank fails to provide the requested information.
Beyond the controversy over the gold reserves, Domfeh emphasised the importance of maintaining strong external buffers to stabilise the cedi and curb speculative demand for foreign currencies.
He noted that higher reserves give the central bank the capacity to intervene in foreign exchange markets when necessary.
“When you have more reserves, it sends a signal that the central bank has enough strength to counter speculative demand for foreign currencies,” he said.
However, Domfeh argued that long-term currency stability should not rely solely on central bank interventions in the foreign exchange market.
Instead, he urged policymakers to reduce Ghana’s dependence on imports by expanding domestic production, particularly in sectors such as agriculture and manufacturing.
He cited rice imports, which cost Ghana about $1.2 billion annually, as an example of how local production could reduce pressure on foreign exchange reserves.
“If we produce more of what we import, we will reduce demand for dollars and strengthen the cedi naturally,” he said.
Domfeh also welcomed government proposals to introduce a sliding-scale royalty system for gold, which could increase mining royalties beyond the current 5% depending on global prices.
He said the approach could help Ghana capture more value from its mineral resources while remaining competitive with other mining jurisdictions.
But he stressed that Ghana should go further by investing in local gold processing and manufacturing, rather than exporting raw gold and allowing other countries to capture most of the value along the supply chain.
“If someone wants gold ornaments, they should come to Ghana instead of going to Dubai,” he said.
Domfeh concluded that transparency in the management of Ghana’s strategic resources, including gold reserves, is essential for maintaining public trust and safeguarding the country’s long-term economic interests.
Source: asaaseradio.com
