Vice President and flagbearer of the New Patriotic Party (NPP), Dr. Mahamudu Bawumia, has promised to peg the value of the cedi to gold if elected as president.
This comes after the Bank of Ghana successfully completed a domestic gold purchase program, during which it purchased 65.4 tons of gold worth US$5 billion, greatly increasing Ghana's gold holdings.
Speaking on Thursday at the Royal Ghana Gold Refinery's opening in Accra, Dr. Bawumia said the new foreign exchange policy would guarantee the Cedi's long-term stability.
“I would like to propose a new foreign exchange regime management architecture for Ghana next year in which the value of the cedi with everything we have put in will be anchored to gold. I want us to move our foreign exchange management because we need an anchor, and I believe that the best anchor for the Cedi is gold. I want us to anchor the Cedi to gold.
“I am proposing a framework, which we will discuss with the central bank, of course, and we will see where. But the framework that I am proposing is very simple. Having looked at all that we have done, all significant demand for gold should be channeled through the Bank of Ghana’s gold purchase programme.
“If you have GHȼ3 billion and you are looking to buy forex, the Bank of Ghana can take the GHȼ3 billion and buy gold and give you your forex. Demand equals supply; the exchange rate doesn’t move.
“It is just a simple use of our gold reserves to meet the demands of forex. Once you can anchor the Cedi with gold so that you are able to meet demand, then there are so many extra forex reserves to do other things for the country.
“But then you will maintain long-term exchange rate stability, which will be anchored on gold, and then we will move forward,” the Vice President said.
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