Gold Purchase Programme: BoG revise target from 10,000 oz to 217,000 oz
Information reaching norvanreports, indicate that the Central Bank has revised upwards its annual target of buying gold to be kept as reserves from the initial 10,000 oz to 217,000 oz.
The revision of the target is believed to be due to the fact that, the BoG wants to quicken its accumulation of gold reserves and help stabilize the cedi in the medium term.
The gold purchase programme represents a significant and sustainable addition to Ghana’s foreign exchange reserves over time and strengthen the country’s balance of payments.
Ghana’s gold reserves is currently pegged at 8.74 metric tons, making Ghana the eighth African country with the largest gold reserves on the Continent.
With the upward revision of the Bank of Ghana’s Domestic Gold Purchasing Programme, the country’s gold reserves is expected to increase and possibly overtake Algeria which has the largest gold reserves (174 metric tonnes) on the Continent.
Here are the top 10 African countries with the largest gold holdings in 2021
- Algeria 174 metric tons
- South Africa – 125 metric tons
- Libya – 117 metric tons
- Egypt – 80.73 metric tons
- Morocco – 22.12 metric tons
- Nigeria – 21.37 metric tons
- Mauritius – 12.44 metric tons
- Ghana – 8.74 metric tons
- Tunisia – 6.84 metric tons
- Mozambique – 3.94 metric tons
Meanwhile, the Central Bank is expected to commence its gold purchase programme [in cedis] starting this month, September 1, 2022.
BoG to have first right of refusal for gold purchase
Vice President, Mahamudu Bawumia, some weeks ago, announced a new policy decision for the Bank of Ghana (BoG) to have first right of refusal for all gold mined in the country, as part of attempts to position the central bank to build mineral reserves to stabilise the cedi.
This means BoG will be given the right to purchase any quantity of locally produced gold it needs before the rest is exported outside the country.
The latest decision, which is already backed by law, is expected to enhance the BoG’s gold purchase programme to build up its foreign exchange reserves and combat depreciation of the cedi against major trading currencies.
“The central bank will purchase the gold at world market prices and the mining companies will export the portion that is not purchased by the Bank of Ghana. Ultimately, once we accumulate enough gold, future borrowing and our currency can be backed by gold. This will stabilise the cedi long-term,” Dr. Bawumia said at the launch of Accra Business School’s IT Programmes.
“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 in the next few years,” he said.
Newmont makes historic 3,500 ounces gold sale to Bank of Ghana
Meanwhile, Newmont Ghana has successfully sold 3,500 ounces of gold to the Bank of Ghana (BoG) under the Central Bank’s Domestic Gold Purchasing Scheme launched last year.
This makes Newmont Ghana the first mining firm in the country to make gold sales to the apex bank under the scheme.
Making the announcement, Regional Senior Vice President of Newmont Africa, Dave Thornton, remarked Newmont’s pioneering leadership in such a gold sale agreement is expected to be emulated by other mining firms in the country.
Adding that, the sale of the gold to the Central Bank is a further demonstration of Newmont’s commitment to creating value and its contribution towards maintaining the fiscal stability of the country.
“Indeed, Ghana’s Vice-President during the just ended West Africa Mining and Power Conference and Exhibition, held at the Accra International Conference Centre, lauded the company for its trailblazing role and contributions towards the development of the country.
“Newmont Africa intends to leverage the reputational value of this historic feat by widely publicizing across internal and external channels to affirm its value creation credentials and contributions,” stated Mr Thornton.
