Ghana’s gold-driven economic gains could vanish within months – Prof Bokpin

Renowned economist Prof Godfred Bokpin has cautioned that Ghana's recent economic gains, primarily driven by gold, could be lost within months if global gold prices plummet. In an interview on Joy FM's Super Morning Show, Prof Bokpin highlighted the vulnerability of the nation's economic indicators to shifts in international gold prices, suggesting they are not yet stable.

During a discussion on the Domestic Gold Purchase Programme (DGPP) losses, he warned that a significant drop in gold prices could erase the recently celebrated macroeconomic stability within six to eight months. Prof Bokpin emphasized that such a price drop could surpass 40 percent, rendering the current stability theoretical. He cautioned against viewing the present gold boom as a sign of enduring economic health, urging policymakers to consider historical patterns of commodity price corrections.

Prof Bokpin recommended comprehensive stress testing to evaluate the economy's resilience to a sharp decline in global gold prices, particularly focusing on foreign exchange reserves and forex stability. He further advocated for a more holistic approach to evaluating the gold sector, incorporating environmental costs such as deforestation and water depletion.

Prof Bokpin underscored the necessity of transitioning beyond reliance on primary commodities and warned that a growth model centered on commodities and environmental degradation would ultimately prove unstable and unsustainable.