Key takeaways:
- Ghana allocated 5 billion cedis ($429 million) for gold purchases after shifting financing from the central bank to government
- Goldbod’s trading losses widened its deficit to 9 billion cedis last year
- Reserves hit a record $14.5 billion in February before easing to $12.9 billion by June
Ghana has allocated 5 billion cedis ($429 million) in its revised 2026 budget to finance gold purchases aimed at boosting foreign exchange reserves, after shifting responsibility for financing the program from the central bank to the government.
The allocation goes to the Ghana Gold Board, known as Goldbod, which buys unrefined gold from small-scale miners in local currency.
The shift opens the national budget to potential financial strain, since the institution posted trading losses last year that widened the central bank’s deficit on gold transactions to 9 billion cedis, up from 5.7 billion cedis in 2024.
That deterioration has fueled concern that the gold purchase program could erode Ghana’s fiscal gains as the country recovers from its debt crisis.
Ghana established Goldbod in 2025 as the sole agency authorized to purchase gold from artisanal and small-scale mines for export, part of an effort to curb smuggling and restore gold flows through official channels.
The move had an immediate effect, with gold exports more than doubling to $21 billion in 2025 from $10.3 billion the year before.
Why the IMF pushed for this change
The new arrangement made it easier for the state to buy gold using cedis and later sell it for foreign exchange, boosting the dollar supply in the domestic market and helping curb inflation by stabilizing the local currency.
The Bank of Ghana had been pre-financing the program, separate from its standard gold purchasing activity, but the International Monetary Fund raised concerns that the arrangement was quasi-fiscal in nature and could undermine the central bank’s independence.
The IMF pushed for the arrangement to end, prompting the shift to government financing.
Ghana projects its budget deficit will rise to 2.2% of gross domestic product this year, up from 1% in 2025, as President John Mahama increases spending modestly to support economic recovery following the country’s 2022 debt default and subsequent restructuring.
How Ghana plans to offset the new cost
To protect its fiscal targets from the added Goldbod allocation, Ghana will cut capital expenditure to 52.5 billion cedis from a previously planned 57.5 billion cedis, according to the revised budget. The government has also moved to reduce the program’s operational cost to 5% of gold purchased, down from 14.5%.
Bullion buying under the program helped push Ghana’s foreign exchange reserves to a record $14.5 billion in February, before they eased to $12.9 billion by the end of June. That build-up supported the cedi, which gained 41% against the dollar last year, making it one of the best-performing currencies globally among those tracked by Bloomberg.
The currency has since given up some of those gains, but its earlier strength helped dampen import costs and slow inflation to 5.3% in June from 23.8% in December 2024, allowing the central bank to cut its policy rate to 14% from 29% in 2024.
Under the revised structure, Goldbod will hold regular auctions to sell dollars into the market, with the central bank stepping in only if it chooses to intervene directly.
