It’s Illogical to Keep 30.5 Tonnes of Gold in Reserves and Fold Your Arms, Bereft of Ideas While Inflation Stands at 54% — Finance Analyst Defends BoG’s Gold Strategy

Finance Analyst and Energy Policy Analyst, Richmond Eduku has defended the Bank of Ghana’s (BoG) decision to reduce the proportion of gold in the country’s international reserves, describing it as a strategic move aimed at stabilizing the economy and easing pressure on ordinary Ghanaians.

According to Eduku, holding over 40% of reserves in gold, as was the case in December 2024, when the country grappled with skyrocketing inflation of 23.8% (and at certain periods even exceeding 54%), mounting debt, and widespread arrears across key sectors, was tantamount to leaving a critical resource idle while citizens suffered.

Ghana’s international reserves are a key indicator of the country’s macroeconomic health. They consist of gold holdings, foreign currency, and other liquid assets, which the BoG uses to support imports, stabilize the cedi, and meet external obligations. According to the BoG’s Summary of Economic and Financial Data for December 2025, Ghana’s total international reserves stood at US$13.8 billion, up from US$9.3 billion in December 2024, even after gold holdings were reduced from 30.5 tonnes to 18.6 tonnes. Eduku emphasized that this data provides a factual basis for understanding the strategic rationale behind the adjustments.

“Gold is a valuable asset, but it cannot sit idle,” he said. “Reserves must be actively deployed to generate liquidity, support imports, and settle arrears. By converting part of the gold into foreign currency and other liquid assets, the BoG has diversified the portfolio, increased flexibility, and ensured that resources actively support economic stability, all while maintaining a substantial gold buffer of 18.6 tonnes.”

In December 2024, Ghana faced staggering arrears and debts across critical sectors, which exacerbated the economic hardship for citizens. Government arrears were estimated at GH¢67.5 billion, excluding the GH¢68 billion owed by the Electricity Company of Ghana (ECG), GH¢32 billion owed by Cocobod, and US$1.73 billion owed to Independent Power Producers (IPPs). Contractors were also owed GH¢21 billion in road sector payments alone, reflecting years of unresolved obligations.

Since assuming office, the Mahama government has systematically addressed these arrears. Notable payments include GH¢115.9 million in premix fuel arrears, clearing subsidies owed to small-scale fishers, and GH¢13 billion allocated in 2025 to settle verified contractor claims, restoring confidence and reducing liquidity pressures on the economy.

In addition, the government prioritized external debt servicing, making approximately US$1.17 billion in Eurobond payments in 2025. These payments have reduced Ghana’s overall debt burden, lowered the debt-to-GDP ratio, and strengthened the country’s credibility with international investors. In the energy sector, the government cleared US$1.47 billion in legacy energy debts, including US$597 million to restore World Bank guarantees, US$480 million in outstanding gas invoices, and US$393 million owed to Independent Power Producers. These interventions ensured the stability of energy supply, which is critical for both households and businesses.

Eduku further noted, that Ghana’s strategic approach aligns with global best practices. While Ghana previously held over 40% of reserves in gold, peer countries such as Chile and Brazil maintain only 20–25% of reserves in gold, diversifying the remainder into foreign currency assets. This allows central banks to support liquidity, generate returns, and ease economic pressure on citizens, while still ensuring reserves grow and remain a strong buffer against external shocks.

The results of this strategy are already evident. Between December 2024 and December 2025:
• Total reserves rose from US$9.3 billion to US$13.8 billion
• Inflation fell from 23.8% to 5.4%
• Monetary Policy Rate (MPR) dropped from 26% to 18%

These measures, combined with payments to settle arrears and external debt obligations, have directly eased economic pressure on ordinary Ghanaians, lowered the cost of fuel and goods, and created a more stable environment for businesses.

The Finance Analyst concluded: “It would have been illogical to keep 30.5 tonnes of gold in reserves while the economy was struggling with hyper inflation, unpaid arrears, and rising systemic debt. The BoG’s decision to diversify its gold holdings is a calculated, strategic measure to ensure that resources actively contribute to economic stability, reduce arrears, service external debt, and improve the living conditions of ordinary Ghanaians. Gold remains a strong foundation, but now it works for the people rather than sitting idle.”