Gold is a sovereign asset. It is universally accepted, immune to sanctions, and uncorrelated to the policy choices of any one nation.

COMMENT | Gabby Asare Otchere-Darko |  Africa stands at a pivotal economic crossroads. The continent is the world’s largest gold-producing region, yet it holds a fraction of global central bank gold reserves. For decades, gold-rich African economies have operated in a global financial architecture where the US dollar sits at the apex. African nations mine the world’s most trusted store of value, but accumulate their reserves in the currency of another state, one whose fiscal and geopolitical priorities frequently run counter to their own.

This mismatch has left African currencies perennially vulnerable.

When the dollar strengthens, African currencies weaken.

When US interest rates rise, African borrowing costs spike.

When geopolitical tensions flare, African import bills soar.

Gold, by contrast, is a sovereign asset. It is universally accepted, immune to sanctions, and uncorrelated to the policy choices of any one nation. Its trustworthiness spans millennia. Lately, Ghana, Africa’s leading producer, is charting a new course that other nations are beginning to follow. Instead of treating gold purely as an export commodity, Ghana and others are increasingly viewing it as a strategic financial asset to bolster reserves, reduce external vulnerabilities, and create a more resilient economic foundation.

The Ghana Model: A Blueprint for Strategic Resource Leverage

Ghana’s recent experience offers a compelling case study in pragmatic resource management. In response to economic pressures in the early 2020s, the Bank of Ghana, under the leadership of Dr Ernest Addison, initiated a Domestic Gold Purchase Programme. The objective was clear: to rebuild the nation’s foreign exchange reserves. The strategy involved purchasing gold directly with cedis from large-scale miners and formalised aggregators working with small-scale and artisanal producers. While a portion was sold for essential imports, including under a “Gold for Oil” initiative, the majority was retained as a strategic reserve asset. This was not a formal return to a gold standard but a calculated move to strengthen the central bank’s balance sheet and its capacity to manage exchange rate volatility.

The Gold for Oil (G4O) programme emerged from this framework as an emergency macroeconomic stabilisation tool during one of the most turbulent periods in Ghana’s recent economic history. By late 2022, ex-pump fuel prices had tripled, driven by spikes in global oil prices and intense pressure on the cedi. Bulk Oil Distribution Companies (BDCs) were competing aggressively for scarce U.S. dollars, creating a vicious cycle: the scramble for forex weakened the currency, and the weaker currency further inflated fuel import costs. The G4O initiative broke this cycle by using Ghana’s domestically purchased gold to either pay directly for refined petroleum or generate forex without drawing on the open market. This eased pressure on the cedi, reduced fuel import premiums, stabilised pump prices, and restored a measure of monetary control at a time when the economy urgently needed breathing space.

Beyond crisis response, G4O demonstrated a deeper insight: that a gold-producing nation should not be perpetually vulnerable to currency swings driven by dollar-priced energy imports. The Bank of Ghana’s analysis showed that by leveraging even a fraction of Ghana’s annual gold output, especially from the small-scale sector, the country could cover a substantial share of its petroleum import bill while insulating its economy from speculative forex dynamics. Supplier premiums, which had reached US$150–170 per metric ton in the open market, fell to US$50–80 under the G4O arrangements due to improved bargaining power and competition. The initiative validated a principle with broader continental relevance: resource-backed macroeconomic tools, when properly governed, can reduce external dependence and strengthen domestic resilience.

The results were significant: Ghana’s official gold holdings nearly quadrupled over two years. This accumulation, combined with disciplined fiscal adjustments and favourable global gold prices, contributed to a remarkable turnaround.

By 2025, gross international reserves had recovered to cover nearly five months of imports, and the cedi staged a strong recovery, becoming one of the year’s best-performing currencies.

The results have been striking.

From Minimal Reserves to Strategic Stockpiling

• May 2023: 8.78 tonnes
• December 2024: 30.53 tonnes
• April 2025: 31.37 tonnes
• September 2025: 37.06 tonnes

The Ghana Gold Board (GoldBod), established in 2025 to centralise licensing, formalise the gold supply chain, curb smuggling and better coordinate national gold policy, has effectively assumed responsibilities that the Precious Minerals Marketing Company (PMMC) had, until now, been performing, in collaboration with the BoG. This naturally invites a measure of caution. Similar restructurings elsewhere have sometimes drifted into quasi-fiscal roles, creating governance and accountability risks. Ghana must therefore ensure that GoldBod strengthens the systems that were already working, while giving the new institution the opportunity to demonstrate real added value through strong oversight and clarity of mandate.

The key takeaway is not that gold alone is fixing Ghana’s economy, but that it is providing a crucial, sovereign-owned buffer. It is enabling more effective monetary intervention, cushioning the economy against external shocks like oil price spikes, and demonstrating how a nation can use its own endowment to regain policy space.

A Continental Trend: Beyond Export-Only Models

Ghana is not alone. Across Africa, major gold producers are learning from the West African nation’s experience and re-evaluating the old extract-export model to retain more value and stability at home.

In October 2024, Tanzania effected a directive which mandated 20% of exported gold to be purchased by the central bank. It was probably the first country to notably follow Ghana’s footsteps when the East African country began buying gold from local traders and miners from June 2023 amid depreciation pressure on the shilling, the local currency.

Namibia is actively working to retain more domestically mined gold and has explicitly stated its intent to increase gold’s share in its national reserves to diversify away from foreign currency dependence.

Burkina Faso has mandated that a significant portion of national gold production be sold to the state, paid for in local currency, ensuring this wealth contributes directly to national financial strength.

Botswana, traditionally a diamond powerhouse, has also begun strategically accumulating gold as part of its foreign reserves, highlighting its role as a buffer against global uncertainty.

Kenya is planning to incorporate gold into foreign reserves, “following in Ghana’s footsteps” to control currency fall. The Central Bank of Nigeria has also announced a policy shift to a strategic gold acquisition programme to “strengthen foreign reserves and reduce reliance on the US dollar.” Mozambique is also considering a similar focus.

These nations are acting on a shared insight: if you mine a universally trusted asset, you should strategically hold it to underpin your own economic resilience.

The Imperative for Strong Institutions and Value Addition

For this model to succeed, strong governance is non-negotiable. Ghana’s establishment of the Ghana Gold Board (GoldBod) to centralise licensing and curb illegal mining and smuggling could be a critical step if properly managed and supported by a strong culture of accountability. As a strong advocate for Africa optimising its beneficiation on the value chain of its riches, the issue of value addition for our primary resources, such as gold, has long been a concern for many of us. I recall advocating for Ghana, the continent’s largest gold producer, to envision something far greater than Dubai’s gold souk. It was disheartening to see Ghanaians traveling to Dubai to purchase gold jewellery when we could utilise a portion of the vast land at the Ghana Trade Fair Centre to build the world’s largest gold ornaments and trading hub—transforming it into a major global tourist attraction and a true value-addition centrepiece for our nation.

The development of local refining capacity and certification standards, such as the refineries in Accra and the proposed national assay lab, should all help build trust and capture more value from the gold supply chain. These institutional and industrial efforts transform a raw commodity into a foundation for a more sophisticated, domestically controlled financial ecosystem.

Africa’s Golden Opportunity for Strategic Autonomy

Ghana’s journey from crisis to resilience illustrates a powerful principle: Africa’s path to greater economic control is paved with its own resources. The continent holds an estimated 40% of the world’s gold reserves. Leveraging this endowment strategically is an exercise in pragmatic sovereignty.

The challenges are real and require sustained effort: combating illegal mining, strengthening institutions, building infrastructure, and ensuring transparent reserve management. However, the potential rewards are transformative: stronger national balance sheets, reduced vulnerability to foreign currency volatility, and a more credible foundation for long-term prosperity.

Ultimately, Africa’s most secure path to stability lies not in relying solely on the paper currencies of other nations, but in wisely and strategically harnessing the immense value that lies beneath its own soil. Ghana, over the last three years, has shown the way.

******

The author is the Senior Partner of Africa Legal Associates (part of the Pan-African law group, Africa Law Practice International (ALPi) Group) and the Executive Chairman of the Africa Prosperity Network.