The flagbearer of the New Patriotic Party (NPP), Dr. Mahamudu Bawumia, has announced a strategic initiative to stabilize the Ghanaian cedi using the nation’s gold reserves if he is elected president in the December 7, 2024, general elections.

This policy proposal he said aims to tackle the persistent volatility of the cedi, bolster investor confidence, and enhance the overall economic stability of Ghana.

The Ghanaian cedi has experienced significant depreciation over the past years, impacting inflation rates and eroding the purchasing power of citizens.

Dr. Bawumia

This volatility is primarily driven by external factors such as fluctuations in global commodity prices, the strength of the US dollar, and Ghana’s trade deficits.

To address these issues, Dr. Bawumia’s plan seeks to leverage one of Ghana’s most abundant natural resources—gold.

Speaking at a meeting with Organised Labour, Dr. Bawumia said there is no anchor to hold the cedi except to back it with gold.

“Ultimately, my goal is that we are going to back our currency with gold and that is where I want us to go, increasingly backing our currency with gold because it is very easy for us to do so if you keep having the gold reserves.

“And that will keep a lot of stability in the exchange market. Because right now we don’t have an anchor to hold the currency, but if we back it with gold, it will be very stable, because its value ultimately will be reflected by the value of gold, which is very stable,” he said.

Ghana is one of the world’s top gold producers, and its mining sector is a cornerstone of the economy.

By utilizing the nation’s gold reserves, the government aims to create a more robust backing for the cedi, thereby reducing its vulnerability to external shocks.

Source: Blackgh.com

Leave a Reply

Pin It