A financial analyst, Joe Jackson, has highlighted gold’s potential to support Ghana’s economy and help maintain the recent rise in the value of the cedi against the US dollar. Speaking on TV3’s KeyPoints show on May 17, he explained that growing global demand for gold has made it a safer choice for investors, which benefits Ghana’s currency.
Jackson said that gold has outperformed the dollar over the past eight years. He believes this trend can help Ghana save its economy if the government continues to focus on gold-related programs. One such program is Gold4Oil, which links Ghana’s gold reserves to its oil imports and has helped stabilize the cedi despite some past corruption issues. Jackson urged the government to maintain this program and said it would help the cedi appreciate further.
Besides the Gold4Oil program, external factors are also supporting the cedi’s rise. Jackson pointed to the recent depreciation of the US dollar, caused by trade policies implemented under former US President Donald Trump. These policies weakened the dollar against many currencies, including the cedi. As a result, Ghana benefits from lower costs for fuel imports, which make up over $400 million monthly in expenses.
The weakening dollar and falling oil prices reduce pressure on Ghana’s currency and help lower fuel prices at the pumps. Jackson also noted that international rating agencies recently downgraded the US credit rating, adding to the dollar’s challenges. These global developments align with Ghana’s economic interests and help strengthen the cedi.
Other experts praised Ghana’s Finance Minister Dr. Cassiel Ato Forson and Bank of Ghana Governor Dr. Ernest Addison for introducing policies that have helped improve the cedi’s value despite the external challenges.
The Gold4Oil program was created to use Ghana’s gold reserves as a way to support oil imports and ease foreign exchange pressures. Although it faced some corruption allegations, the program has helped stabilize the cedi and reduce pressure on the country’s foreign reserves.
The combination of rising gold prices, falling oil prices, and supportive government policies presents a positive outlook for Ghana’s economy. If the government continues backing the Gold4Oil program and maintains strong financial policies, the cedi is likely to stay strong. This will help control inflation, reduce import costs, and encourage more investment in the country.
Gold’s role in Ghana’s economy could prove vital as the country navigates economic challenges. The success of gold-linked programs and favorable global trends offers hope for continued growth and stability.
