Governor of Bank of Ghana , Dr Ernest Addison
The Bank of Ghana has begun purchasing gold as part of moves to boost its reserves which has grown steadily over the last fifteen years to almost US$11.00 billion.
It follows the successful launch of the Central Banks’s domestic gold purchase programme at the Banks headquarters in Accra today 17 June.
Speaking at the launch, Governor of BOG Dr Ernest Addison said the Central Bank is hoping to double its gold holdings in the next five years with the programme.
“The programme we are launching today therefore sets the stage for Ghana to purchase gold as part of efforts to build its reserves. This initial step will enable the Bank of Ghana (BoG) buy domestically produced gold from selected gold aggregators and mining firms and pay in the local currency at the prevailing market price. Through this programme the BOG expects to double its gold holdings in the next five years.” he said.
Addison added “Other than the diversification benefits of gold for our reserves portfolio, the domestic gold purchase programme will pave the way for BOG to grow its foreign exchange reserves to foster confidence, enhances currency stability, creates a more attractive environment for foreign direct investments and economic growth. This programme will also enable the Bank leverage its gold holdings to raise cheaper sources of financing to provide short[1]term foreign exchange liquidity.”
Among others, the domestic gold purchase programme will pave the way for BOG to grow its foreign exchange reserves to foster confidence, enhances currency stability, creates a more attractive environment for foreign direct investments and economic growth.
It will also enable the Bank leverage its gold holdings to raise cheaper sources of financing to provide short[1]term foreign exchange liquidity.
Gold acquisition programme process
Dore gold (unrefined gold) purchased from a Gold Aggregator will be assayed by the Precious Minerals Marketing Company (PMMC) – the national assayer. To assay is to simply test a metal to determine its ingredient and quality. Upon going through a satisfactory assaying process, the PMMC will submit an assay report to BOG on the day of delivery. Using the agreed pricing sources for gold and the cedi/dollar exchange rate, the value of the gold supplied will be determined and paid for within 48 hours to the aggregator.
At the next stage, BoG will aggregate the assayed dore gold purchases at its vaults and from time to time, send the validated dore gold to an LBMA-certified refinery to be processed to the required international standard of good gold delivery (fineness of 99.99%).
Finally, the LBMA-certified gold will then be stored at designated locations as part of the BOG’s reserves.
Fred Dzakpata
