Gold can’t be Ghana’s only FX lifeline – Gideon Boako calls for broader external-sector strategy

Dr Gideon Boako, a Tano North Member of Parliament and Deputy Ranking Member of Parliament’s Finance Committee, has questioned the strength of Ghana’s new gold-to-foreign-exchange model amid worries over the cedi and dwindling international reserves. In a recent report on September 27, Dr Boako scrutinized Ghana’s evolving external-sector system following the shift of gold-purchasing duties from the Bank of Ghana to the Ghana Gold Board (GoldBod) starting July 2026.

Under this new system, GoldBod now primarily depends on commercial banks and private off-takers for financing gold purchases, with the gold export revenues expected to generate foreign exchange for the market and reserves.

According to Dr Boako, GoldBod has already showcased substantial capability in generating foreign exchange. In August, the newly instituted model produced US$1.315 billion in foreign exchange, its first full month under the revised financing structure. Of this, around US$668 million was allocated to commercial banks, while approximately US$647 million was set aside by the Bank of Ghana for reserve accumulation.

However, Dr Boako cautioned that a single strong month was insufficient to ascertain if the model could hold up under unfavorable market conditions. “The crucial question is whether the model can consistently mobilize financing on a larger scale when market conditions become more challenging,” he emphasized in the report.

Dr Boako highlighted potential risks such as decreased commercial-bank liquidity, reduced funding from private off-takers, reduced gold production, export shipment disruptions, and escalating financing costs. These concerns arose amidst mounting pressure on Ghana’s external standing. He noted that the cedi had plummeted by 9.5 percent in real terms against the US dollar on a year-to-date basis as of September, while gross international reserves had also become more volatile.

Dr Boako stated that the ultimate test would be whether GoldBod could persistently supply adequate foreign exchange to commercial banks and the Bank of Ghana without reintroducing the fiscal risks that the July reform aimed to eliminate.