Dr. Muhamadu Bawumia, the Vice-President of Ghana, has urged African countries to take proactive steps to become more self-reliant amid the current global challenges by building its gold and other reserves.
According to Vice-President, African Central Banks must partner with the mining sector and build up their gold reserves in order to withstand the headwinds buffeting their economies in the wake of the COVID-19 pandemic and the Russia-Ukraine conflict.
Dr. Mahamadu Bawumia noted that the aftermath of these two challenges will result in a redefinition of the global economic architecture due to disruptions in supply chains and drastically reduced access to essential items.
Dr. Mahamadu Bawumia made this known when addressing participants at the opening session of the three-day West African Mining and Power Exhibition and Conference (WAMPOC/WAMPEX) in Accra. Dr. Bawumia bemoaned the fact that despite an endowment of several different minerals, and a long history of mining, African countries have very little in terms of reserves and their currencies have a little solid backing to ensure stability.
“The other day I was looking at some data in terms of our gold reserves and looking at Ghana at that time, the data was indicating that we’re the 6th largest producer of gold in the world. So I came back to look at our foreign exchange reserves in terms of gold reserves in the central bank. And when I went down the data we ended up about number 79 in the world in terms of gold reserves.
“And that situation was very much the case for many of the African countries in terms of the large gold producers. If you look at the highest gold reserves in the world, for example, in terms of the Central Bank Holdings, the United States has about over 8000 tonnes, Canada, Germany and so on about 2000 tonnes. In Ghana, our reserves were 8.7 tonnes, as a major gold producer. And this is the case when I thought South Africa will be even much more significant, but it wasn’t much more significant and I was a bit surprised about that.”
Dr. Muhamadu Bawumia
Africa Capable of Attaining Self sufficiency
Vice-President Dr. Bawumia emphasized that not only do African countries need to brace for the coming storm, but they will have to take proactive steps to become more self-reliant.
“In the context of the current global development, you are going to see that the global architecture that is going to come following the Russia Ukraine conflict, the disruptions of the supply chains that we have seen across the world are going to become more visible.
“Countries are going to try to become more self-reliant, and that is really going to be the way forward. You’re going to see a lot more self-reliance. You are going to see a lot more calls for South-South Cooperation in many areas because the lessons are there for us to see.”
Dr. Muhamadu Bawumia
The Vice President opined that COVID-19 has exposed Africa in many areas. He observed that the fact that Africa didn’t have manufacturing capacity for vaccines and is dependent on the generosity of others is a testament to that fact.
“So, we’ve started to try to produce our own vaccines now and our reliance on many other places for agriculture in terms of food has also exposed us. So we’re going to have to really focus on agriculture and many other areas.
“I’m saying this because a new architecture would emerge and we have to be ready to play the game in that new architecture. But it will require that our central banks also have sufficient reserves of foreign exchange to be able to weather the balance of payment crisis that will come from time to time inevitably.”
Dr. Muhamadu Bawumia
