Ghana Shifts Gold Buying to Goldbod with $429M Budget Allocation

Ghana's central bank has shifted its gold-buying program to the Ghana Gold Board (Goldbod) after allocating $429M in the country's budget. The move aims to ensure that more revenue from gold sales stays within formal channels and to separate fiscal and monetary functions, as recommended by the International Monetary Fund.

The IMF had warned against the central bank's earlier program due to its quasi-fiscal characteristics and potential autonomy compromise. By transferring the buying role to Goldbod, authorities seek to keep monetary policy independent while directly channeling gold revenue into fiscal accounts.

Goldbod will now conduct periodic dollar auctions to the foreign-exchange market, with the Bank of Ghana intervening only when necessary to influence currency markets. To mitigate the program's impact on the budget deficit, capital spending has been reduced from 57.5 billion cedis to 52.5 billion cedis.

The shift reflects Ghana's ongoing economic transformation, driven by record gold production and sales. The country has emerged from a debt crisis, relying heavily on gold output to rebuild foreign reserves and stabilize the currency.