‘The gains are not durable’ – Prof Bokpin warns over Ghana’s gold-driven stability

Professor Godfred Bokpin, a finance expert and economist at the University of Ghana, has expressed concerns over Ghana's gold-driven economic stability, warning that it may not be as durable as it appears. In an interview on Joy FM’s Super Morning Show, he highlighted the risks associated with the recent decline in global gold prices.

Prof Bokpin emphasized that the country's focus on the benefits of the recent gold price boom has overshadowed the environmental damage caused by unregulated mining practices. He cautioned that a 40% drop in gold prices could quickly erode the economic gains Ghana has reported over the past six to eight months. According to Bokpin, Ghana's economy is highly vulnerable to changes in global commodity prices, which historically experience significant corrections after periods of robust growth.

To address this vulnerability, he advocated for thorough sensitivity analysis and stress testing of Ghana's gold-dependent economic strategy. Bokpin also urged a thorough evaluation of the gold sector's value chain, focusing on not just foreign exchange earnings and reserve accumulation, but also the environmental consequences like deforestation, water body degradation, and ecosystem destruction.

He stressed that economic growth driven by the destruction of the environment and reliance on primary commodities is unsustainable. Bokpin urged policymakers to consider both macroeconomic indicators and the environmental and social costs of gold production when evaluating the nation's economic health.