Former Vice president Dr Mahamudu Bawumia has once again been vindicated on the government’s Domestic Gold Purchase Programme (DGPP) initiated by previous New Patriotic Party (NPP) government.
The objective of the programme, which was spearheaded by Dr Bawumia, is to rebuild gold reserves, stabilise the foreign exchange market to reduce pressure on the local currency, the cedi, and in turn, support the disinflation process.
Dr. Bawumia also championed the Gold-for-Oil (G4O) in which gold purchased with the local currency, was used as barter for Crude Oil or sold in dollars for the purchase of the dollar.
All these were intended to reduce the pressure on the cedi and make the local currency strong against the major foreign currencies.
Dr Bawumia was bastardised when he championed these programmes but President Mahama and Governor of the Bank of Ghana (BoG), Dr. Johnson Asiama have both acknowledged the importance of the policies in stabilising the Ghanaian economy.
Minister for Finance Dr Cassiel Ato Forson and some government officials have claimed that the current appreciation of the cedi against the foreign currencies, particularly the US dollar, is as result of the work done by the newly established GoldBod.
However, Dr. Bawumia argued that the stability of the cedi, which is backed with the country’s gold reserves cannot be as a result of the GoldBod.
He pointed out that the current NDC government added less than 1 ton to the country’s reserves.
Accordingly, a fact-check by JoyNews vindicated the former Vice President, confirming that “Dr. Bawumia’s claim, that the NDC government hasn’t added a tonne to Ghana’s gold reserve-is true.”
Dr. Bawumia had indicated that Ghana’s economy would have collapsed without the Gold-for-Oil and gold purchase programmes introduced under his watch.
Speaking during his Thank You Tour in the UK at an interaction with the Young Executive Forum (YEF) in London, NPP 2024 flagbearer said the country’s current economic stability is directly tied to bold interventions started before the NDC administration took over.
“If we had not instituted the gold purchase program as well as the gold-for-oil program, our economy would have collapsed.
“It would have, because where would we have gotten $5 billion just to support the economy? You wouldn’t have gotten it,” he added.
Dr. Bawumia said the decision to go for gold was deliberate and strategic because gold didn’t require foreign exchange.
“Why I went for gold is that you don’t need to export to get gold. You need to export cocoa to get foreign exchange, timber, oil — you need to turn it abroad. But as for gold, you just need to dig it or pay for it with cedis. So it was a much easier way to do it.”
Dr Bawumia revealed that in just two years, the Bank of Ghana purchased $5 billion worth of gold.
“Remember, we were going to the IMF just for $3 billion and going through all sorts of hoops. But in two years, we had bought $5 billion,” he said.
