Ghana’s recent exchange rate stability has been attributed to a combination of strategic policy interventions that have strengthened foreign exchange inflows into the formal financial system.
At the centre of this renewed stability is the Ghana Gold Board, widely known as GoldBod, whose operations have helped redirect significant foreign currency earnings from gold exports into regulated channels.
According to Dr. Theo Acheampong, Technical Advisor at the Ministry of Finance, the combined impact of GoldBod, cocoa earnings and foreign exchange repatriation has created a new lifeline for the cedi.
Dr. Acheampong explained that for years, Ghana struggled to fully benefit from its gold exports, particularly from the artisanal and small scale mining sector. Despite the sector’s importance, a substantial portion of foreign currency earnings from gold failed to enter the formal banking system. This weakened the country’s ability to build foreign exchange reserves and manage currency pressures.
He noted that analysis suggests only about 20 to 30 per cent of dollar inflows from gold produced by the ASM sector were previously captured by regulated financial institutions. The remainder circulated through informal channels, limiting the central bank’s capacity to intervene effectively in the foreign exchange market.
According to him, GoldBod has fundamentally changed this dynamic. Current policy tools now compel gold export proceeds to pass through GoldBod, ensuring that the associated foreign exchange flows into the formal system and eventually reaches the Bank of Ghana. This shift, he stressed, has made a decisive difference in stabilising the cedi.
A Policy Shift with Measurable Impact
Dr. Acheampong described the GoldBod framework as a deliberate and targeted policy response to longstanding structural weaknesses in Ghana’s foreign exchange management. By enforcing the routing of gold export proceeds through official channels, authorities have been able to significantly increase the supply of dollars available within the banking system.
“This time around, policy is being used to ensure that those dollars are brought into the formal system through GoldBod and eventually to the central bank,” he said, adding that this approach distinguishes current interventions from previous efforts.
The increased availability of foreign exchange has enhanced the Bank of Ghana’s ability to smooth volatility in the FX market. This has supported confidence among investors and businesses, while also helping to reduce speculative pressures on the cedi.
Beyond IMF Reforms
While Ghana is currently implementing an International Monetary Fund supported programme, Dr. Acheampong argued that IMF reforms alone would not have been sufficient to stabilise the currency. In his assessment, the GoldBod initiative has provided critical additional support that strengthened the overall impact of macroeconomic reforms.
He stated that without gold backed interventions, Ghana’s exchange rate performance would have been far weaker. Rather than ending the year around GHS10.45 or GHS10.50 to the US dollar, the cedi could have depreciated significantly further.
“If we were relying solely on IMF reforms, the exchange rate would not have closed the year at GHS10.45 or GHS10.5,” he noted. “It could have weakened from GHS15 to around GHS13.”
This perspective highlights the importance of domestic policy innovation in complementing external support programmes, particularly in resource rich economies like Ghana.
IMF Recognition of GoldBod’s Role
Dr. Acheampong further reinforced his argument by pointing to the IMF’s own assessment of Ghana’s foreign exchange operations. According to him, the Fund has acknowledged a more assertive role played by the Bank of Ghana in the FX market, supported by stronger balance of payments inflows.
He quoted the IMF as noting that the central bank has become increasingly active as an intermediary in the foreign exchange market. This increased activity has been underpinned by improved inflows, which have expanded the central bank’s capacity to intervene when necessary.
Significantly, the IMF identified the domestic gold purchase programme as a major source of these inflows. Alongside cocoa earnings and foreign exchange repatriation, GoldBod has emerged as a key pillar of Ghana’s evolving currency management strategy.
Cocoa and Repatriation Strengthen the FX Base
Beyond gold, Dr. Acheampong emphasised the continued importance of cocoa exports in supporting Ghana’s foreign exchange position. Cocoa remains one of the country’s largest sources of export earnings, providing a stable stream of dollars that complements inflows from gold.
Foreign exchange repatriation measures have also played a role by ensuring that export proceeds and other foreign earnings are brought back into the domestic financial system. Together, these measures have broadened the base of foreign exchange supply, reducing Ghana’s vulnerability to external shocks.
According to Dr. Acheampong, the combined impact of GoldBod, cocoa and repatriation has strengthened Ghana’s balance of payments position and enhanced the credibility of its exchange rate management framework.
In the intervening time, Dr. Acheampong suggested that sustaining the gains made will require continued policy discipline and effective coordination between fiscal and monetary authorities. He stressed the need to maintain transparency and accountability in the management of gold proceeds, while also deepening reforms that support export growth and foreign exchange inflows.
He concluded that GoldBod’s growing role in Ghana’s currency management strategy demonstrates how targeted domestic policies can deliver tangible macroeconomic benefits. By harnessing the country’s natural resources more effectively, Ghana has created a stronger foundation for exchange rate stability and broader economic resilience.
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