Former Vice President and New Patriotic Party (NPP) presidential candidate, Dr Mahamudu Bawumia, has attributed Ghana’s improved capacity to support the cedi to the accumulation of foreign exchange reserves under the Gold-for-Reserves programme.
According to Dr Bawumia, the initiative enabled the Bank of Ghana to build sufficient reserves to significantly increase its ability to intervene in the foreign exchange market.
Speaking on Thursday at a meeting with members of the Ghana Small-Scale Miners Association in Accra, he said the programme became particularly important during the country’s economic crisis, when limited access to foreign exchange contributed to pressure on the cedi.
Dr Bawumia said that under the International Monetary Fund (IMF) programme, the central bank had been restricted to using a maximum of US$80 million per month for foreign exchange market intervention.
He said the restriction severely limited the Bank of Ghana’s ability to respond to demand for dollars at a time when businesses and individuals required foreign exchange to finance fuel, machinery, medicines and other imports.
“That meant a maximum of $960 million for a whole year, far below Ghana’s monthly demand for dollars to pay for fuel, machinery, medicine and other imports,” he said.
He explained that the restriction formed part of the IMF’s reserve accumulation strategy but argued that it also contributed to foreign exchange scarcity and increased pressure on the local currency.
“So, we were really constricted in terms of availability of foreign exchange. And at the same time, the cedi was depreciating almost on a daily basis,” Dr Bawumia stated.
He said the situation changed after Ghana accumulated additional reserves through the Gold-for-Reserves programme, which he said had been proposed to the Bank of Ghana during the economic crisis.
According to him, the IMF restriction was lifted in January 2025 after sufficient reserves had been accumulated.
Dr Bawumia said the removal of the restriction significantly expanded the central bank’s capacity to supply foreign exchange to the market.
“Because we had built up the foreign exchange reserves through Gold-for-Reserves, that restriction was removed,” he said.
He claimed that the Bank of Ghana had since been able to inject at least US$1 billion per month into the foreign exchange market, compared with the previous ceiling of US$80 million per month.
“From $80 million maximum per month ($960 million per year) to $1 billion a month!!! We couldn’t even do $1 billion a year before,” he said.
Dr Bawumia argued that the increased intervention capacity had been a key factor behind the relative stability of the cedi.
He said the experience demonstrated the importance of building adequate foreign exchange reserves to give the central bank sufficient room to respond to market pressures.
The former Vice President used the engagement with small-scale miners to highlight what he described as the broader benefits of the Gold-for-Reserves initiative and its role in strengthening Ghana’s reserve position.
He maintained that increased gold mobilisation and reserve accumulation had provided the country with greater flexibility in managing foreign exchange pressures and supporting currency stability.
