Ghana’s central bank has clarified that the sharp reduction in the country’s gold reserves toward the end of 2025 was a calculated financial decision rather than an erosion of national wealth. According to the Bank of Ghana (BoG), the drop in gold holdings from 37.1 tonnes in September to 18.6 tonnes by December reflects a deliberate portfolio adjustment aimed at strengthening the country’s overall foreign reserve position.
Speaking on the development, Governor Dr. Johnson Asiama explained that the move formed part of a broader reserve management strategy designed to balance risk and enhance liquidity. He noted that prior to the adjustment, gold represented more than 40 percent of Ghana’s international reserves — a figure considerably higher than the 20–25 percent range typically maintained by many comparable emerging and developing economies. Such a high concentration, he said, exposed the country to potential volatility in global gold prices and limited the flexibility of reserve deployment.
Portfolio Diversification and Risk Control
The Bank of Ghana emphasized that the reduction in gold stocks was not equivalent to selling off national wealth without replacement. Instead, a portion of the gold was converted into foreign exchange assets, which remain fully accounted for within the country’s international reserves. These funds are reportedly being reinvested into interest-bearing and liquid instruments intended to support reserve growth and generate moderate returns over time.
Central banks routinely diversify their reserve portfolios to avoid over-reliance on a single asset class. Gold, while historically regarded as a safe-haven investment, can experience price swings that may influence the valuation of national reserves. By redistributing part of its holdings into currencies such as the US dollar, euro, and other reserve assets, Ghana aims to improve financial stability, ensure quicker access to funds during external shocks, and maintain a healthier reserve composition.
Dr. Asiama underscored that the action represents a shift in asset structure rather than depletion. Effective reserve management, he explained, requires periodic reviews that respond to global market conditions, trade balances, inflation trends, and currency pressures. The central bank maintains that the strategy aligns with international best practices followed by monetary authorities worldwide.
Background to the Decision
Earlier in December 2025, the Bank of Ghana had already signaled the possibility of adjusting its gold exposure in a Monetary Policy Committee (MPC) Frequently Asked Questions publication. The document outlined a strategic asset allocation framework intended to align the nation’s reserves with long-term economic objectives, including currency stability, import cover adequacy, and investor confidence.
The partial divestment of gold was presented as a pre-emptive step to reduce vulnerability to commodity price fluctuations. Officials stressed that the decision was not driven by short-term speculation on gold prices but by a long-term view of financial resilience. The Bank also indicated that lowering the gold share of reserves could reduce the need for complex hedging strategies that might otherwise increase operational costs and financial risk.
Maintaining Confidence and Transparency
Market analysts note that transparency in reserve management decisions is critical for sustaining investor trust and currency stability. The BoG has reiterated its commitment to regularly publishing reserve data and policy explanations through MPC briefings and official communications. This openness is intended to prevent misinformation and reassure both domestic and international stakeholders that Ghana’s economic fundamentals remain intact.
The central bank further assured the public that it continues to monitor global economic indicators, exchange rate movements, and commodity trends to determine whether additional adjustments will be required. Such flexibility, officials argue, is essential in an era marked by fluctuating energy prices, geopolitical uncertainty, and evolving trade dynamics.
Ultimately, the Bank of Ghana maintains that the reserve restructuring strengthens — rather than weakens — the country’s financial position. By diversifying assets and reducing concentration risk, the institution aims to preserve value, enhance liquidity, and support long-term macroeconomic stability while maintaining confidence in Ghana’s monetary framework.
Source: Africa Publicity
