Dr. Asiama Urges Government to Budget for Gold-for-Oil and Gold-for-Reserves Costs
Governor of the Bank of Ghana (BoG), Dr. Johnson Asiama, has called for a review of the trading model underpinning the gold-for-oil and gold-for-reserves programmes, arguing that the current cost structure is no longer sustainable for the central bank.
Appearing before Parliament’s Public Accounts Committee (PAC) on Monday, January 12, 2025, Dr. Asiama said the national interest would be best served by reassessing how the programmes are financed, including whether the Ministry of Finance should make explicit budgetary allocations to cover associated costs.
According to him, the programmes support Ghana’s reserve build-up and broader macroeconomic stability, yet the full financial burden has been borne by the Bank of Ghana since their inception.
“The inherent costs are currently being borne by the Bank of Ghana, not just in 2025, but since the programme started,” Dr. Asiama told the committee.
He disclosed that all losses incurred under the gold-for-oil and gold-for-reserves initiatives in 2024 were absorbed by the central bank, stressing that such an arrangement places additional strain on the BoG’s already weakened balance sheet.
Dr. Asiama cautioned that the Bank is not in a position to continue shouldering these costs, particularly in the context of challenges it has faced since 2022. He noted that discussions are currently ongoing with the Minister of Finance on possible reimbursement for costs absorbed by the Bank since 2024.
“The key question going forward is who takes charge of the costs incurred in that exercise,” he said, adding that if government budgets for these expenses as part of a quasi-fiscal intervention, and further cost reductions are achieved, the model can be operated efficiently.
The Governor appealed to Parliament to support efforts to reform the framework, contain costs, and ensure a fair sharing of the financial burden among stakeholders. He argued that such reforms would help sustain the progress already made, including recent signs of price moderation across parts of the economy.
Dr. Asiama said the Bank believes the programmes have contributed meaningfully to reserve accumulation and economic stabilization, and that addressing the cost structure is critical to preserving these gains.
“We believe that the optimal way forward is to address the costs and determine who bears them so that we can sustain the progress made in the interest of Ghanaians,” he told the committee.
He added that the Bank will continue engaging government and other state agencies to ensure the programme is reformed and maintained in a manner that supports long-term economic stability.
