Ghana has introduced a gold coin in an effort to boost savings and manage money-market liquidity.
According to Bank of Ghana Governor Ernest Addison, the coin will be refined to 99.99 percent purity and will come in 1-ounce, half-ounce, and quarter-ounce sizes.
“This initiative is a testament to our unwavering commitment to deepen financial markets by offering other avenues for savers to invest. It also serves as a significant reminder of our nation’s rich gold heritage,” Addison said when he introduced the coin.
The coins feature the Ghana Coat of Arms on the front and the Independence Arch on the back.
Initially, the coins will only be available through commercial banks in Ghana and must be purchased with Ghanan cedi (1 cedi = 0.62 USD).
The coins will be minted using locally sourced gold and will comply with the central bank’s responsible gold sourcing rules.
Ghana ranks as Africa’s biggest gold producer.
Ghana launched a domestic gold-buying program in 2021. According to a report by Business Insider Africa, Ghana now requires big gold miners in that country to sell 20 percent of their refined gold to the country’s central bank.
According to the Bank of Ghana, it has purchased 65.4 tons of gold valued at around $5 billion from the domestic market. The gold is intended to increase the country’s gold holdings and augment foreign reserves.
Addison said he hopes the coin will ease the country’s excess liquidity and provide a safe and stable way to increase savings.
“The Ghana gold coin enables the Bank of Ghana to mop up excess liquidity in the banking sector and will supplement the bank’s bills for liquidity management. It gives those residents in Ghana an additional avenue to invest to reap the benefits of the Bank of Ghana’s domestic gold purchase program.”
Addison said the gold coin would provide Ghanans a savings option not linked to the dollar.
”Now, if you don’t buy dollars, you will buy treasury bills or bonds. We are giving you an opportunity from the domestic gold purchasing program to also buy gold.”
Africans Increasingly Turning to Gold
If Dr. Mahamadu Bawumia has his way, gold will become an even bigger part of Ghana’s economy. The presidential candidate recently said he would push to back the country’s currency with gold. He said a gold-backed currency would “keep a lot of stability in the exchange market.”
“Right now, we don’t have an anchor to hold the currency, but if we back it with gold, it will be very stable, because its value ultimately will be reflected by the value of gold, which is very stable.”
A growing number of countries in Africa are turning to gold. Uganda, Tanzania, and Nigeria all recently launched domestic gold-buying programs to boost reserves. The Nigerian central bank has also announced plans to bring its existing gold reserves back into the country “to mitigate risks associated with the weakening U.S. economy.”
Zimbabwe has created its own gold-backed currency, although the government has already inflated the ZiG.
The growing movement toward gold in Africa underscores an important truth: while fiat currencies come and go, gold has remained trusted money for over 5,000 years.
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