Gold-driven cedi datability masking deep structural fragility – IERRP warns

The Institute of Economic Research and Public Policy (IERPP) has issued a warning to the Bank of Ghana and fiscal managers regarding their over-reliance on record-high global gold prices to maintain macroeconomic stability. Dr. Frank Bannor, a Senior Research Fellow at IERPP, cautioned that celebrating current reserve figures without addressing Ghana's underlying structural weaknesses creates a dangerous illusion of economic recovery.

While acknowledging that the central bank's gold acquisition strategy and aggressive market interventions have offered temporary relief to the Cedi, the IERPP highlighted the economy's extreme vulnerability, as recent pressure on foreign exchange reserves even with gold trading near historical highs of $4,280 per ounce. The institute outlined four critical observations for national policy direction, including the need for unrealized structural reform, commodity price dependency, re-evaluating FX interventions, and aggressive export diversification.

The IERPP urges policymakers to use the current windfall to implement deep structural adjustments before global market conditions shift.

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