The Bank of Ghana’s (BoG) gold reserves with the Central Bank of England and the US Federal Reserve amounted to a total of Ghs 2.05 billion at the end of 2020.
This is per data contained in the Central Bank’s 2020 Annual Report and Financial Statements.
The Bank at the end of the 2020 fiscal year also held some Ghs 907 million worth of gold reserves with Switzerland-based gold company, UBS Gold Investment.
According to the BoG, gold reserves stored in its vault at the end of 2020 was valued at Ghs 111.7 million, some 2,548 percentage points less the value of gold reserves held outside the country.
Cumulatively, the Central Bank’s total gold reserves at the end of 2020 was valued at Ghs 3.07 billion.
BoG to double holdings of gold reserves Domestic Gold Purchasing Programme
The Central Bank three months ago launched a domestic gold purchasing programme to augment its foreign reserves with a view to doubling its gold holdings in its foreign exchange reserves portfolio.
According to the Governor of the Bank of Ghana (BoG), Dr Ernest Addison, despite the tremendous growth in the BoG’s foreign reserves in the last 15 years, gold as a portion of the foreign reserves remained unchanged at 8.77 tonnes, representing $675 million (6.14 percent) of the country’s total Gross International Reserves (GIR).
“The programme we are launching today therefore sets the stage for Ghana to purchase gold as part of efforts to build its reserves. This initial step will enable the Bank of Ghana (BoG) buy domestically produced gold from selected gold aggregators and mining firms and pay in the local currency at the prevailing market price. Through this programme the BoG expects to double its gold holdings in the next five years,” stated the Governor.
Adding that other than the diversification benefits of gold in its reserves portfolio, the domestic gold purchase programme will pave the way for BoG to grow its foreign exchange reserves to foster confidence, enhance currency stability and create a more attractive environment for foreign direct investments and economic growth.
“This programme will also enable the Bank leverage its gold holdings to raise cheaper sources of financing to provide short-term foreign exchange liquidity,” he stated.
Touching on the ability of the domestic gold purchasing programme to transform artisanal (galamsey) and small-scale mining in the country, Dr Addison averred the programme will guarantee a fair purchasing price for gold mined by artisanal and small-scale miners, providing an incentive to formalise and move away from damaging environmental and social practices.
“It would also lead to a route to formalise and improve the ability to sell into formal gold markets and thereby reduce their vulnerability to illegal actors in the domestic and international gold supply chains,” the Governor stated further.
