Gideon Boako questions resilience of Ghana’s new gold-to-forex model

Dr Gideon Boako, a Tano North Member of Parliament and Deputy Ranking Member of Parliament’s Finance Committee, has expressed doubts over the durability of Ghana's new gold-to-foreign-exchange model amid mounting pressure on the cedi and volatility in the nation's international reserves. In a recent article published on September 27, Dr Boako scrutinized the evolving external-sector structure following the transfer of domestic gold purchasing duties from the Bank of Ghana to the Ghana Gold Board (GoldBod) from July 2026.

Under this new setup, GoldBod increasingly depends on commercial banks and private off-takers to fund gold purchases, with proceeds from gold exports intended to generate foreign exchange for the market and reserves. Dr Boako highlighted that the model has already proven its capability to generate foreign exchange, reporting a US$1.315 billion inflow in August of the first full month under the new financing framework.

This figure consisted of US$668 million sold directly to commercial banks and US$647 million provided to the Bank of Ghana for reserve accumulation. Despite this, he cautioned that a single robust month does not guarantee the model's ability to endure less favorable market conditions. "The crucial question is whether the model can consistently and on a larger scale mobilize financing when market conditions worsen," Dr Boako emphasized in his article.

He pinpointed possible risks, such as tighter commercial bank liquidity, diminished financing from private off-takers, diminished gold production, disruptions in export shipments, and escalating financing costs. These apprehensions arise amid the strain on Ghana's external position. Dr Boako pointed out that the cedi has depreciated by 9.5 percent in real terms against the US dollar on a year-to-date basis as of September, while gross international reserves have also become more volatile.

He stated that the critical test would be if GoldBod can continue supplying adequate foreign exchange to commercial banks and the Bank of Ghana without reintroducing the quasi-fiscal risks that the July reform aimed to eliminate.