Boako credits Bawumia’s gold programme for tackling cedi crisis
Member of Parliament for Tano North, Dr Gideon Boako, has credited former Vice President Dr. Mahamudu Bawumia with introducing measures that addressed a longstanding challenge facing Ghana’s cedi.
Dr Boako said the Domestic Gold Purchase Programme and the Gold-for-Oil initiative provided alternative ways for Ghana to raise foreign exchange and reduce pressure on the country’s limited dollar reserves.
According to him, the measures are now helping the current National Democratic Congress (NDC) government stabilise the cedi, contain inflation and reduce interest rates.
Dr Boako, a former spokesperson for Dr Bawumia, made the comments in a post on Facebook.
He explained that Ghana faced a severe economic crisis in 2023 following the economic impact of the Russia-Ukraine war, eventually leading the country to seek support from the International Monetary Fund (IMF).
He said a major condition under the IMF programme was for the Bank of Ghana to rebuild its foreign exchange reserves.
As part of the programme, the central bank’s direct monthly foreign exchange intervention was initially capped at $80 million before being reduced to $60 million, a limit Dr Boako said was significantly below the economy’s demand for dollars.
He argued that the then New Patriotic Party (NPP) government complied with the restrictions and gradually rebuilt the country’s reserves, which by the end of 2024 had exceeded the IMF’s required threshold.
Dr Boako said this subsequently allowed the IMF to lift the intervention cap in 2025, giving the current government greater room to intervene in the foreign exchange market.
”That effort is what enabled the IMF to lift the cap in 2025. That is what is allowing the new National Democratic Congress (NDC) government to intervene heavily in the market today without restriction,” he said
He added that Ghana still needed substantial foreign exchange to finance essential imports, including fuel, medicines, spare parts, food and beverages, as well as allow companies to repatriate profits.
Dr Boako said Dr Bawumia’s response was to leverage Ghana’s gold resources through the Domestic Gold Purchase Programme and Gold-for-Oil initiative to strengthen reserves and reduce demand for dollars.
He argued that the initiatives helped provide foreign exchange without relying heavily on international borrowing.
Dr Boako also disputed claims that the Bank of Ghana sold an average of $250 million in foreign exchange every month in 2024.
He said the figure combined different forms of foreign exchange sales, including auctions and other market windows, and should not be interpreted solely as direct market intervention.
He maintained that increased foreign exchange flows and the growth in reserves were made possible, in part, by the gold-purchase arrangements introduced under Dr Bawumia.
Source: 3news.com
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