Ghana's central bank will purchase 8.7 t of domestically-mined gold over the next five years to bolster its foreign currency reserves, Governor Ernest Addison said on Thursday.
Ghana, Africa's top gold producer, is weathering its steepest decline in production since 2004 after the Covid-19 pandemic disrupted global supply chains.
The bank hopes the gold purchases will help it raise cheaper sources of financing to provide short-term foreign exchange liquidity.
"This day is indeed historic because it marks the first time the Bank of Ghana is embarking on domestic gold purchasing to augment our foreign reserves with a view to doubling our gold holdings," Addison said in a speech.
The country's foreign reserves have steadily grown over the last 15 years to just under $11-billion, but gold reserves have been unchanged over the same period, according to central bank figures.
An initial 540 kg of gold will be purchased over the next year from domestic mining firms and small-scale miners, Addison said, with the goal of acquiring 8.7 t by the end of 2026.
The Bank of Ghana will pay for the gold in local currency at prevailing market prices, he said.