Ghana’s new central bank governor, Johnson Asiama, has suspended the country’s gold-for-oil program and expressed confidence that the cedi will stabilize after last year’s volatility.
Asiama, who was sworn into office by President John Mahama on February 25, emphasized the importance of maintaining a balanced monetary policy to support exchange rate stability.
“We intend to maintain an appropriate monetary policy stance,” he stated, adding that fiscal discipline under Mahama’s administration should help stabilize foreign exchange markets.
With interest rates at 27% and inflation easing to 23.5% in January, Asiama believes that better coordination between monetary and fiscal policies will reduce price pressures, aiding Ghana’s economic recovery from its 2022 debt default.
The gold-for-oil program, introduced by the previous administration to mitigate currency fluctuations, involved the central bank purchasing gold with local currency for barter or oil purchases.
However, Asiama revealed that the program had led to financial losses, prompting its suspension. While he did not disclose specific figures, he indicated that the central bank may withdraw from gold purchases entirely, transferring the responsibility to a planned Gold Board.
Ghana’s oil import bill reached $4.5 billion in 2024, with the Bank of Ghana acquiring 65.4 tons of gold for reserves and barter, ending the year with 30.5 tons in reserves.
Asiama has also pledged to reduce losses at the central bank, which recorded a record spending overrun of 60.9 billion cedis ($3.9 billion) in 2022, largely due to loan write-downs required for an International Monetary Fund bailout.
His administration aims to restore financial stability and strengthen investor confidence in Ghana’s economy.
