This Policy Transfers Wealth, Weakens Production, and Leaves Posterity to Pay the Price.
Ghana’s gold-for-forex scheme is presented as an anti-inflation measure. Upon examination, it is not stabilization; it is a structured transfer of wealth executed at the expense of the public balance sheet. The policy converts a durable national asset—gold held across generations—into foreign exchange, uses that exchange to buy back cedis from banks, and contracts domestic liquidity. Temporary import price reductions are the only measurable outcome. No structural change occurs in production, employment, or capacity. National assets decline, obligations remain, and the domestic base for future income is weakened. This is not reform; it is a depletion of the nation’s wealth under the guise of monetary policy.
Prices Follow Production
Inflation is determined by the production of goods and services, not by currency manipulation. Temporary reductions in consumer prices achieved through cheaper imports do not alter underlying supply constraints. Importing goods cannot address domestic shortages of wheat, energy, transport, or infrastructure, and short-term price relief without production capacity expansion is insufficient and unsustainable. Persistent dependence on imports ensures recurring demand for foreign exchange, reinforcing structural vulnerability.
Banks Are Production Engines, Not Lottery Booths
Banks provide credit to farmers, builders, manufacturers, and other productive actors, yet the buy-back policy treats them as if they merely pass money to importers or privileged claimants. When government sterilizes liquidity to favor imports, it picks the winners in the economy as it restricts funds available to productive borrowers, shrinking domestic output, employment, and the multiplier that generates further supply. Policy execution can therefore increase imports while simultaneously weakening the domestic economy, transferring economic opportunity and value from local producers to creditors and foreign suppliers.
Historical Structure Remains
Ghana’s postcolonial economy was designed to export raw materials and import finished goods, paying the gap with foreign debt. Selling gold to finance imports and retire cedis reproduces this structure with modern instruments. Structural dependence is maintained while national assets are converted into short-term liquidity for foreign exchange to fund the businesses of politically “ordained” importers. The policy replicates historical extraction dynamics under a modern, even local and politically motivated financialized veneer, ensuring that the nation travels in circles while congratulating itself for moving forward.
Selling Gold Is Self-Decapitalization
Gold reserves are public assets accumulated and maintained across generations. Exchanging them for foreign currency reduces national wealth and increases exposure to external claims. The policy reallocates value from the state to financial claimants, both foreign and domestic political actors, while obligations denominated in dollars remain unchanged. Asset liquidation without reducing liabilities constitutes a deterioration of the public balance sheet.
Austerity Misidentifies the Villain
Reducing cedi circulation to cheapen forex treats money as the problem rather than a tool. The true driver of currency instability is obligations in foreign currency—debt service, rent, royalties, and profit repatriation. Tight liquidity constrains domestic production, limits competitiveness, and perpetuates import dependence. The policy requires repeated borrowing or further asset sales, institutionalizing dependence and depletion. Short-term price effects are achieved at the cost of permanent structural weakening.
Accounting Analysis of the Policy
Gold held by the state is a non-renewable public asset recorded on the national balance sheet. Foreign exchange obtained by selling that gold is not a productive asset. Currency buy-backs shrink domestic liquidity but do not alter production capacity. Temporary price reductions do not resolve structural shortages, and obligations denominated in foreign currency remain unaffected. The state holds fewer real assets post-transaction while exposure to external claims remains. The net effect is a transfer of value from the public balance sheet to financial claimants. Reducing assets without reducing liabilities is balance-sheet deterioration, regardless of short-term price movement.
Consequences and Structural Implications
Sterilizing domestic liquidity to cheapen forex elevates the “chosen” importers but it constrains productive credit, limits domestic output, and reduces employment. Limited production sustains import dependence, which renews demand for foreign exchange and justifies further asset sales or borrowing. This cycle is self-reinforcing, ensuring repeated depletion of national wealth. The policy stabilizes claims while weakening the productive economy.
The Crime
This strategy prioritizes financial stabilization over productive capacity. The productive economy is residual, addressed only after prices, creditors, and foreign suppliers are satisfied. Emergencies that recur by design are structural, not accidental. Each episode of inflation requiring the liquidation of inherited assets demonstrates the policy is not managing volatility; it is institutionalizing depletion.
The question the policy must answer is simple: Does it increase Ghana’s capacity to produce goods domestically without liquidating public assets? On evidence and accounting logic, the answer is no.
The outcome is clear: the policy transfers wealth from the state to the chosen, creditors and foreign suppliers, depletes national assets, maintains structural dependence, and leaves Ghana vulnerable to repeated cycles of asset sales. That is not stabilization. That is a balance-sheet crime.
Closing
The evidence is incontrovertible. Ghana’s gold-for-forex policy does not stabilize prices; it destabilizes the nation’s capacity to produce, reallocates wealth from public assets to private financiers and creditors, and reproduces historical structures of dependency under modern instruments. Each step—selling gold, contracting cedis, favoring imports, constraining credit—creates a predictable, closed-loop cycle: depletion of assets, persistence of obligations, suppression of local production, and perpetual reliance on foreign exchange. No emergency excuses the liquidation of inherited wealth. No short-term price relief justifies a long-term structural surrender. The policy treats the productive economy as disposable, subordinated to financial claims and imported goods. It is a balance-sheet crime disguised as stabilization. It is a theft committed in daylight against citizens yet unborn. And it answers the question it refuses to ask: whether the state can provide for its people without mortgaging their inheritance. The answer is plain. It cannot.
Government has so far pumped $10 billion to control the USD from moving up as against the Ghana Cedi (exchange rate). This $10 billion has created jobs in America while NDC government under President Mahama has not added a single job to the existing ones.
Ironically , the so called 24hour economy program which seeks to create jobs in Ghana needs only $4 billion but government is dragging its feet to fund it. Ghana is currently doing more imports than exports under this administration. Each time we import finished products from abroad it comes with huge loads of unemployment.
Today, traders have more goods in their shops but customers do not have the purchasing power to buy the needed goods. Money (the cedi) is missing in people’s pockets. During the christmas season , Adum in Kumasi was not busy. I was out to purchase items and i received a total shock in my life on the 27th of December because this is unacceptable in a business community like Adum. Traders are indeed complaining because their goods are being expired day after day.
I have been asking myself this simple question “how long can Hon. Ato Forson continue to sustain this bad policy “?
I know that the center cannot hold. Let’s keep quiet, give it a time and watch it.
SAD.
Is Adum Ghana 🇬🇭 Ghana was actually very busy this Christmas 🎅 so if you are at your adum and is not busy don’t tell us Christmas was not good we enjoyed it very very well here in Accra and other important parts of the country
Your ignorance is loud, the $10bn is not an expenditure. The dollars are auctioned and therefore the country has the cedis equivalence of the dollars that have been ‘pumped’ into the economy.
Thank God it was pumped into our own Ghana and Not into properties abroad!
If 10b is pump into the economy to stabilize prices, i think is better we are all enjoying it through the price reduction on commodities , fuel, transport fees are stable now, nobody is fighting with trotro mates, is better we all enjoy the 10b through stable economy
Masa use this same energy to tell your traders to reduce the prices of their goods and they will be bought in no time .
Know the difference in roles between BOG and the finance ministry .
Pumping money to stabilize the currency and tame inflation is the primary role of BOG not finance ministry . You don’t expect BOG to sit aloof with high reserves when inflation is eating lives and savings way .
The question Is are we depleting our reserves by pumping these forex into the market ?
We know our beloved NPP would rather see the nation suffer than to inject the 10 billion usd which would give the Ghanaian businesses and individuals leverage. Traders who choose to keep their goods because the NPP skyrocketed the cedi are not ready for business. Let them keep hoarding their goods. The purchase power of the cedi being low is not news however we can see some improvements. Let us remind ourselves that my NPP and your NPP saw to the folding and exit of business to other countries. If the government knew about purchase power why didn’t they work on stabilizing the cedis, cutting unnecessary taxes and levies to ensure businesses operate smoothly and individuals have enough in their pockets? May be you can share with us what you purchased and let’s run the analysis. WE have to do our homework if we want to comeback. We can’t do that with cheap and baseless propaganda Snr.
You don’t pumped money to stabilise your currency you pump money into production to export more goods then market forces will determine rate of inflation and then the economy will grow. Creating jobs while controlling inflation.
At least the comments shows many Ghanaians are educated now, the opposition can’t just throw dust into our eyes
Besides Gold FX has always been part of the market which account for more than 60% of the $10bn which means the net funds is less than $3bn….
I think what they shd be pushing the current Govt to do is to create alternative FX source to cover when Gold prices drops, maybe Soybean exports and other commodities through mechanisation n proper distribution channels so we don’t her these Rice Glaute n things again n also getting another Gas infrastructure which they didn’t do in 8 years so we reduce the import of liquid fuel that expensive n increase TOR production to 100k per day.
So we should go back to the 17gh to a dollar right? You head is full of air and nothing else. Nonsense
Why are you so pained when the country is doing well, since when did government intervention in the forex market became a crime…. You guys are naysayers n doom wishers but it will crush on ur heads 😂😂😂
The government financial policy is running a 24HRS economy. That’s why their economic data has been approved by many Ghanaians and opposition even trying to get some credit on the economic achievement of just one year of current administration. Now, I think what opposition is confused about is the 3 shift job ? Well some of the government agencies has started a 24HRS shift, and any private company also can start and get a help from the government including the editor, Ameyaw, if you wanted to stay awoke for 24HRS.
This is the reasoning of an MSc holder in Industrial Finance and Investment, not from any mere university but from KNUST, my alma mater. I am horrified! Now I understand what they meant when they said the NPP only came to steal and destroy.
Did the government print the $10B?
Did government borrow the money from the capital market?
The answer to these 2 basic questions is NO.
This implies the $10B used to stabilize the cedi is internally generated therefore if the consequence of it’s usage is creation of jobs, then obviously the jobs are created locally not in America as you erroneously postulate
Thank you Mahama and the NDC government for pumping the money into our own economy to ease standard of living even to a common man.That man’s party would have preferred to share the &10b among themselves and leave the dollar to rise causing hike in prices of goods and services like the h3ll we went through in 2022
It seems to me like you made the same point several times and each time it was just as confusing. You speak of gold being the people’s inheritance but what are they to do with that inheritance is the question. You speak of structural problems but how are they to use that gold to solve those structural problems as well as other problems within the short, medium and long term? That is the question. Once we propose answers to those challenges, then we can see if those answers are better than the current model.
Sorry, you did not understand the essay.
Narmer Amenuti I am sure you understood my questions though so perhaps providing a response to them may help.
Kofi Akakpo Nye bro., the question being answered here is simple, and you didn’t get it, which is fine. I will indulge you: Can the state “provide for its people without mortgaging their inheritance? The answer is plain. It cannot.” If the rest of the essay was “confusing” at least this point should not elude you, I hope. 😀
Dade Afre Akufu thank you for your indulgence. “What are they to do with that inheritance” was my initial question.” Perhaps you missed that. You are faced with a binary situation, what do you do as a state? Not doing anything is itself a choice. What do you do?
Kofi Akakpo I am not sure why you ask a different question. We are not faced with “what to do” with the inheritance. We are faced with what the government is doing with the inheritance. “Can the state provide for its people without mortgaging their inheritance? The answer is plain. It cannot.” That is, the state is already mortgaging the inheritance. This is the argument Narmer is making. You can provide a rebuttal to it. Simply saying we have to do something, else it is doing nothing is besides the point.
Dade Afre Akufu for someone who is quick to declare what others don’t get, you sure miss a lot. This is the second time you have declared all Narmer has said is X. So what? I am saying inaction is an action. There is no doing nothing. I want to hear what he would have done. There is a lot of talk about structural problems. No one doubts that. There is a lot of talk about winners in the process, no one questions that. SO WHAT? Do you know anyone economy without winners and losers? What is the prescription? What would you do? How would you attack the problems? You can have several paragraphs saying we have a problem, and that the solutions others have deployed also have problems. What are your solutions?
If you inherit a highly indebted, import-dependent economy with runaway inflation, what do you do? What do you tackle first? How do you most effectively deploy your resources. That is the conversation I think we should have. Not, “their people are getting rich.” Surely, that is not too hard a question is it?
This is not the first time I have seen you come to a thread on an essay, you provide zero insight yet you ask your own questions and proceed to task others to answer them for you. You go and answer them yourself on your page! No one has stopped you. You put something else in quotes, “their people are getting rich” and no one has made such a statement. You are living inside your head. You need to step out.
They have “chosen” their winners. And they know it! They know them! I bet the President is one of them.
I will not be shocked.
Narmer Amenuti You have to give some credit to the West and Israel. They have no diamonds but somehow are the number exporters of finished diamonds. I mean, you really can’t fathom the bottomless stupidity going on in Africa. Schemes like the Gold-for-Forex sounds brilliant, yes, to idiots living in their fake palaces in Ghana like Mansa Musa.
This is an astute analysis I am frustrated that Ghanaian citizens remain quiet while their gold is being given out for free in exchange for absolutely nothing… Not a highway or a bridge, not nuclear energy or weapons, not an industry or any tangible goods. NOTHING. Why do citizens continue to allow this policy that so clearly liquidates their future…and by the way, polluted their environment with toxins of galamsey? Why do citizens allow these crimes of 10 billion + given to their neocolonial master in exchange for nothing?