Ghana's reliance on gold to generate foreign exchange and build international reserves has raised concerns about sustainability, according to Dr. Gideon Boako, Member of Parliament for Tano North. In an article, Dr. Boako examined the implications of transferring the Domestic Gold Purchase Programme from the Bank of Ghana to the Ghana Gold Board. The new arrangement has placed the Gold Board at the centre of Ghana's gold-to-FX system, relying on commercial banks and private off-takers to finance domestic gold purchases.
The Ghana Gold Board has demonstrated significant capacity to generate foreign exchange under the new financing structure, reporting US$1.315 billion in FX in August. Of this amount, US$668.21 million was sold directly to commercial banks, while US$646.59 million was made available to the Bank of Ghana for reserve accumulation. Dr. Boako cautioned that strong initial performance should not be mistaken for evidence that the model has been fully tested.
The restructuring followed concerns about the financial burden of the Domestic Gold Purchase Programme on the central bank. According to the International Monetary Fund, the programme facilitated US$10.9 billion in artisanal gold exports in 2025, equivalent to 9.5 per cent of Gross Domestic Product. However, the IMF estimated that the programme generated losses of about US$1.7 billion, equivalent to 1.5 per cent of GDP, in the same year.
Dr. Boako warned that the country's ability to accumulate reserves should no longer be the only measure of the strength of its external position. He argued that Ghana must also demonstrate its capacity to generate foreign exchange when economic conditions become difficult. The real test of the new model will come if financing conditions tighten, gold production declines, gold prices weaken, or private off-takers reduce their financing.
Dr. Boako called for Ghana to broaden its foreign exchange base instead of relying heavily on gold. He identified manufacturing, agriculture and agro-processing, tourism, digital services, traditional exports, and remittances as areas that could provide additional sources of foreign exchange. This diversification is necessary to shield Ghana from commodity-market shocks and build a more resilient economy.
The International Monetary Fund noted that the change in the gold financing model removed the central bank's exposure to incremental operational losses associated with gold purchases. However, GoldBod and the government will carry the related costs. Dr. Boako also called for greater scrutiny of GoldBod's purchase prices, financing costs, margins, operational expenses, and FX generation.
Dr. Boako emphasized that Ghana's objective should be to build an economy capable of generating foreign exchange from multiple sources, maintaining adequate reserves, and absorbing external shocks without repeatedly placing pressure on the central bank or the sovereign balance sheet. The country's growing dependence on gold poses a sustainability test, and a more diversified economy is necessary to ensure long-term stability.
Key points
- Ghana's growing dependence on gold to generate foreign exchange faces a sustainability test as the new Ghana Gold Board financing model comes under pressure.
- Dr. Gideon Boako warns that the country's ability to accumulate reserves should no longer be the only measure of the strength of its external position.
- Ghana needs to broaden its foreign exchange base and diversify its economy to shield itself from commodity-market shocks.
