Clean-up of gold marketing system supported cedi appreciation – Seth Terkper
Former Finance Minister Seth Terkper says the clean-up of Ghana’s gold marketing system has helped strengthen the country’s foreign reserves and contributed to the recent appreciation of the cedi.
Speaking on PM Express Business Edition, he joined the ongoing debate over the Bank of Ghana’s financial position, arguing that greater attention should also be given to gains made from reforms in the gold sector.
According to him, one of the key objectives of the reforms was to quickly rebuild Ghana’s external buffers, which has had a positive impact on the local currency.
“One of the things was moving quickly to strengthen the reserves, which translated into the appreciation of the cedi,” he said.
Mr Terkper described the intervention as part of efforts to sanitise the gold marketing system, which he said had previously suffered from leakages and weak controls.
“It’s the sanitisation of the marketing of gold,” he stated.
While acknowledging that the process was not flawless, he said it still delivered meaningful results.
“I believe that, yes, you couldn’t get everything right, but at the same time, we need to complement,” he added.
He explained that the reforms helped bring greater order to the sector and contributed to an increase in reserves held by the central bank.
“There’s some sanitisation of that whole sector, which led to a significant increase in reserves for the central bank,” he noted.
Mr Terkper also placed Ghana’s gold industry within a global economic context, describing gold as one of the strongest competitors to the US dollar.
“Globally, gold is the most aggressive competitor for the dollar, before you come to the euro, yen and others,” he said.
He stressed the importance of Ghana tightening oversight of its gold sector, given the country’s status as a major producer.
“Ghana is the Gold Coast,” he said.
According to him, for many years Ghana’s gold resources were exported without sufficient benefit to the domestic economy.
“Ghana’s gold was going all the way out to other countries, which they were using to stabilise their economy, from the Middle East to Europe to everywhere,” he added.
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