Bank of Ghana Boosts Reserves with 7.70 Tonnes of Gold Acquisition

Bank of Ghana Governor, Dr. Ernest Addison, has announced that since the launch of the Domestic Gold Purchase Programme (DGPP) in June 2021, the bank has increased its gold reserves by over 7.70 tonnes as of June 30, 2023. The total gold reserves now stand at 16.67 tonnes, compared to the previous 8.77 tonnes before the implementation of DGPP.

Dr. Addison explained that the DGPP has successfully contributed to the growth of the country’s foreign reserves by refining purchased gold dore, without affecting local gold producers’ incentives. The program has proven to be effective in diversifying reserve assets and improving the risk-adjusted returns for the reserve portfolio.

Gold bullion, illustration

The Gold Purchase Initiative

Large mining firms accounted for approximately 80 percent of the volumes added through the gold purchase initiative, while the remaining 20 percent came from the artisanal small-scale mining (ASM) sector through an approved aggregator. The DGPP also supports the ASM sector by providing competitive prices for gold purchases.

The Bank of Ghana has developed a responsible sourcing and due diligence framework for the DGPP in collaboration with consultants and industry partners. This framework aims to promote responsible and sustainable mining practices in the domestic ASM sector.

Dr. Addison made these announcements during his speech at the 4th edition of the Ghana Mining Expo 2023 in Takoradi. The expo serves as a platform for sharing ideas, discussing investment opportunities and challenges, and implementing strategies for sustainable mineral resource development and the well-being of mining communities.

The G4O program has provided foreign exchange resources for petroleum product imports

The Governor also mentioned the Gold for Oil (G4O) program, which enables the purchase of gold from licensed small-scale miners and community mining schemes to support the importation of petroleum products. The G4O program has provided foreign exchange resources for petroleum product imports, increased competition among market players, and contributed to lower petrol prices and stability in foreign exchange markets.

Dr. Addison expressed the Bank of Ghana’s commitment to addressing the issues associated with unlicensed miners who violate sustainable mining practices. The bank aims to reduce the activities of illegal operators through the tangible benefits of the DGPP, making it more expensive for them to operate outside the law.

gold bar concept

The Bank of Ghana has implemented a rigorous due diligence process for aggregators, including criminal record checks and site visits to ensure compliance with environmental standards. The bank will gradually expand suppliers in the ASM sector and work towards LBMA certification for local refineries in collaboration with key stakeholders and mining regulators.

The increase in gold reserves provides an additional buffer to help the economy withstand future global economic shocks, enhance resilience, and manage macroeconomic imbalances more effectively. The Bank of Ghana remains committed to promoting responsible mining practices, supporting the formalization drive, and improving standards in the ASM sector.