Namibia’s Central Bank Embraces Ghana’s ‘Gold Purchase Programme’

Namibia has become the latest African country to emulate Ghana’s gold purchase programme by the Bank of Ghana which was launched three years ago in the midst of the global economic crisis.

Former Vice President of Ghana, Dr Mahamudu Bawumia proposed the innovative gold purchasing programme to the Bank of Ghana to increase the country’s gold reserves and use the reserves to strengthen the country’s foreign exchange reserves as well as hedge it against global economic shocks.

The policy succeeded in stabilising the depreciation of the cedi and the fuel prices.

Following the positive impact on Ghana’s currency in the midst of falling global currencies against the US Dollar and high inflation due to the global economic crisis, a number of African countries with gold visited Ghana to study the policy and subsequently announced their own gold purchasing programmes.

Namibia has now joined the league following announcement by its Central Bank that it is also starting its own gold purchasing programme.

The Bank of Namibia (BoN) noted in a statement that it was buying gold to strengthen the country’s foreign exchange reserves.

The move, the Central Bank of Namibia noted, will see gold making up 3 percent of Namibia’s net foreign exchange reserves, aligning the country with new trends in Africa which was started by Ghana.

BoN Governor, Johannes Gawaxab said the decision is part of the country’s broader strategic reforms discussed with the Namibian President Netumbo Nandi-Ndaitwah.

Launch Of Ghana’s Gold Purchasing Programme

In 2022, during the height of the global economic crisis, Ghana’s economy was on the brink with depleted foreign exchange reserves, a depreciated cedis and rising inflation, resulting in increasing cost of fuel prices.

Then Vice President of Ghana, Dr Mahamudu Bawumia proposed the “Gold Purchasing Programme” which would allow the Bank of Ghana to buy gold with cedis to increase Ghana’s gold reserves and use it as foreign exchange instead of the US Dollar.

Following the launch of the programme which successfully increased the Bank of Ghana’s gold reserves, the Central Bank launched the “Gold for Oil” programme which allowed the Central Bank to use gold to pay for oil imports.

This took pressure off Ghana’s currency and significantly stabilised fuel prices from the staggering 22 cedis per liter to around 15 cedis per liter.

Further following Ghana’s successful implementation of this programme, the Bank of Ghana became a reference point in Africa with the central banks of Kenya, Tanzania, Mozambique, Rwanda, Eswatini, Namibia among others sending delegations to Ghana to understudy the concept.

All the countries have implemented same with Namibia becoming the latest country.

Ghana now boasts of a remarkable 31 tonnes of gold reserves, three years after Dr Bawumia launched the “Gold Purchasing Programme” through the Bank of Ghana.

At the time of launching it, Ghana had a paltry 8 tonnes of gold reserves and as at January 2025 when the former government was handing over, the Bank of Ghana had secured 30 tonnes of the gold reserves.

Source: Ghanaweb