Associate Professor of Economics, Ebo Turkson, has described Ghana’s Domestic Gold Purchase Programme as a key stabilisation tool during a period of economic crisis, while calling for reforms to reduce its operational costs.
Speaking on KeyPoints with Alfred Ocansey on May 2, Prof. Turkson said the policy played a critical role in stabilising the cedi, rebuilding foreign reserves, and easing pressure on foreign exchange demand.
“We were coming from a crisis and needed to stabilise the currency and build resilience against external shocks,” he stated.
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According to him, the programme significantly improved Ghana’s external position, including boosting import cover and strengthening reserve buffers.
“It has ensured that we have enough reserves and reduced the pressure on forex demand, especially for imports like oil,” he explained.
Prof. Turkson further noted that exchange rate stability has led to substantial savings in external debt servicing costs.
“When the currency stabilises or appreciates, the cost of servicing external debt reduces significantly,” he added.
Despite these gains, he identified foreign exchange differentials as the programme’s major cost driver, accounting for about 83 percent of total expenses.
However, he expressed optimism that these costs will decline as macroeconomic conditions improve.
“When the currency stabilises and inflation remains low, that gap will begin to close,” he said.
The economist also proposed measures to reduce costs, including strengthening security at gold export points to curb smuggling, which he said forces authorities to offer higher prices to attract gold.
“If we reduce smuggling, the central bank will not need to offer higher prices,” he noted.
He further argued that the government should absorb part of the programme’s cost, given its broader economic benefits.
“This is a public good. Government should gradually take on some of the cost of maintaining stability,” he suggested.
Addressing concerns about the central bank’s balance sheet, Prof. Turkson maintained that such outcomes are not unusual during crisis interventions and do not necessarily weaken the institution.
“What matters is maintaining stability without affecting long-term solvency,” he emphasised.
He concluded that although reforms are necessary, the overall benefits of the Domestic Gold Purchase Programme justify its continuation.