A US-based Assistant Professor of Economics at Niagara University, Dr. Dennis Nsafoah, has described the 15-month reserve stock by the government as unnecessary.

According to him, gold is not just a reserve asset but a continuous flow, hence it already possesses a built-in buffer against external shocks.

“Gold is not just a reserve asset; it is a continuous flow. As long as Ghana maintains steady domestic gold production, effective gold purchasing and export retention mechanisms, and credible macroeconomic policy, it already possesses a built-in buffer against external shocks”.

In other words, Dr. Nsafoah pointed out that Ghana’s resilience comes not only from the stock of reserves, but from the flow of generated foreign exchange. “When flows are strong and reliable, the optimal stock of reserves is lower, not higher. Targeting extremely high reserve levels in a gold-rich economy risks confusing insurance with hoarding”, he explained.

Excessive Reserve Accumulation Can Become Inflationary

Dr. Nsafoah pointed out that excessive reserve accumulation can become inflationary

According to him, there is also a monetary risk that the policy underplays. “To accumulate reserves, the Bank of Ghana must purchase gold or foreign exchange — including FX [foreign exchange] generated from gold exports. Unless these purchases are fully sterilised, they expand domestic liquidity.”

While this has been manageable at recent levels, he said scaling the process up significantly would make sterilisation far more difficult and expensive.

He added that sterilising sustained inflows large enough to push reserves toward 15 months requires continuous issuance of domestic paper or higher interest rates,

“History suggests that such discipline is difficult to sustain politically. When sterilisation weakens, excess liquidity spills into the economy, fuelling credit growth and inflation. In that scenario, the reserve build-up meant to stabilise prices can end up re-creating inflationary pressures”, he mentioned.

The government through the Ghana Accelerated National Reserve Accumulation Policy (GANRAP), 2026–2028, intends to build reserves of 15 months of import cover by 2028.