BoG to have first right of refusal for gold purchase – Bawumia

locally produced gold
  • as a means to stabilise cedi

Vice President, Mahamudu Bawumia has announced a new policy decision for the Bank of Ghana (BoG) to have first right of refusal for all gold mined in the country, as part of attempts to position the central bank to build mineral reserves to stabilise the cedi.

This means BoG will be given the right to purchase any quantity of locally produced gold it needs before the rest is exported outside the country.

The latest decision, which is already backed by law, is expected to enhance the BoG’s gold purchase programme to build up its foreign exchange reserves and combat depreciation of the cedi against major trading currencies.

“The central bank will purchase the gold at world market prices and the mining companies will export the portion that is not purchased by the Bank of Ghana. Ultimately, once we accumulate enough gold, future borrowing and our currency can be backed by gold. This will stabilise the cedi long-term,” Dr. Bawumia said at the launch of Accra Business School’s IT Programmes.

“We must also deepen our industrialisation through value addition to gold; even though Ghana has two gold refineries, neither has London Bullion Market Association (LBMA) certification.

“This limits our full participation in the gold value chain. We will urgently work toward LBMA certification for our refineries in the next few years,” he said.

Value addition to minerals such as lithium and bauxite will similarly be pursued in addition to the IDIF programme and continuous implementation of the automotive sector policy, he added.

The latest decision is against the background that despite Ghana being one of the leading gold producers in the world, its reserves of gold at the central bank at the end of 2021 was only 8.7 kilogrammes.

Domestic Gold Purchasing ProgrammeThe Vice President was speaking for the first time since government’s announcement to seek a bailout from the International Monetary Fund (IMF), and also indicated an impending major reform of the energy sector.

“The energy sector has proven to be the Achilles heel of the economy. The reforms will make the sector more market-based,” he stated.

Dr. Bawumia reiterated that domestic revenue mobilisation is key to self-reliance, and it is given this that government has put in place the architecture and infrastructure to expand the tax base and collect more taxes.

These include a new unified common platform for the collection of property taxes; rationalisation of tax exemptions through the tax exemption bill; ease of filing and paying taxes through a GRA mobile app; and a mandatory filing of taxes and presentation of tax clearance certificates.

“The new architecture for domestic revenue mobilisation should be fully operational by end of the year,” he announced.

He said the focus of economic management by successive governments since independence in Ghana has been on crisis management, as a result of factors such as collapse in commodity prices, increase in oil prices, debt unsustainability, political instability and macroeconomic instability, among others.

“Governments have, by and large, not focused on building the systems and institutions which underpin economic activities in a modern economy,” he said.

Commends Accra Business School

He commended leadership of the Accra Business School for rolling out programmes designed to meet the needs of today’s Ghana.

“The introduction of information technology into classrooms is a necessity for government’s digitalisation agenda. It is the perfect match for knowledge-seekers everywhere as the world is brought to them with concision and wit; an opportunity to learn the language of a digital future and digital economy.

“In this era of global integration, ICT becomes indispensable and embedded in everyday activities. The promises it offers seem limitless.

“It can provide governments, businesses and citizens with access to relevant information and allow them to communicate on order to make informed decisions and enable more efficient processes and services to address various economic, social, financial and educational needs.”

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