- Jinapor backs buying gold to support key sectors with gold-backed forex
- The approach aims to stabilize the local currency
- Focus on transparency and involving private sector players
The Minister for Energy and Green Transition, John Jinapor, has supported the acquisition of gold as a strategic step to bolster the economy.
He stated that using gold-backed foreign exchange (forex) could offer essential financial assistance to Bulk Distribution Companies (BDCs), Independent Power Producers (IPPs), and other critical industries.
During an appearance on PM Express on JoyNews on Tuesday, March 18, he argued that this method would help stabilize the national currency and bring more predictability to the financial system.
“I fully support the purchase of gold and the utilization of forex to assist not only the BDCs but also the IPPs and other vital sectors of the economy to stabilize the currency and improve predictability,” Mr. Jinapor remarked.
He clarified that the strategy is a wise economic decision, as buying and exporting gold allows the government to have better control over forex inflows.
Nevertheless, he acknowledged shortcomings in the previous system, particularly due to the excessive involvement of middlemen. To tackle these issues, Mr. Jinapor emphasized the need to remove unnecessary intermediaries and engage key private sector players, such as BDCs and Oil Marketing Companies (OMCs). “It’s important to bring private sector participants, the BDCs and OMCs, to the table to ensure transparency,” the Minister said.
He also disclosed that the gold purchase program has been paused for a thorough evaluation. “It is currently on hold, and a joint committee, co-chaired by the Deputy Minister of Finance and the Deputy Minister of Energy, is being established. This committee will engage all stakeholders to create a clear plan that benefits both the government and the private sector while avoiding situations where, under the previous administration, the Bank of Ghana faced considerable losses.”
Mr. Jinapor pointed out that the Bank of Ghana faced major financial losses under the former system, with estimated losses nearing GH₵1 billion.
“Records indicate that the Bank of Ghana sustained massive losses—close to GH₵1 billion. While one sector of the economy may benefit, another suffers as a consequence.”
“We don’t want that. We aim for an efficient, workable system that safeguards both the government and private sector players while ensuring the availability of forex,” he added.
The Minister emphasized that the new approach will focus on sustainability and accountability, ensuring that forex generated from gold exports is used efficiently to strengthen critical sectors of the economy.
