Recent data from the Bank of Ghana (BOG) show a notable improvement in Ghana’s external reserve position. Gross International Reserves have risen steadily, import cover has improved, and headline indicators point to a stronger external buffer than the country had a year ago. On the surface, this is welcome news.

However, beneath the aggregate numbers lies a more complex and uncomfortable reality. The rise in foreign exchange reserves has occurred at a time where there is also a sharp reduction in gold holdings, both in value and in tonnage.

This divergence has become central to a growing public debate, particularly against the backdrop of claims that foreign exchange injected into the economy is largely being generated through GoldBod operations.

The Numbers Tell Two Different Stories

From the Economic and Financial data shared by the BOG, between September and December 2025, Ghana’s gold holdings fell sharply in tonnage, even as total reserves continued to rise.

In value terms, gold holdings also declined after peaking earlier in the year, despite global gold prices remaining on a strong upward trajectory.

This immediately challenges the popular narrative. If GoldBod were consistently generating fresh foreign exchange inflows that were strengthening the reserve position, one would reasonably expect gold holdings to be stable or increasing.

Instead, the data show the opposite: gold is falling, foreign currency assets are rising.

The Governor’s Clarification

In response to public concerns, the Governor of the Bank of Ghana offered an important clarification during the MPC press briefing. According to the Governor, the reduction in gold holdings was not accidental nor a sign of distress, but a deliberate reserve management decision.

At the time the decision was taken, gold reportedly accounted for over 40 percent of Ghana’s total reserves, far above the 20–25 percent range observed among many peer countries.

The BOG in its attempt to address this concentration risk, the Bank decided to rebalance its reserve portfolio by converting part of its gold holdings into foreign exchange.

The Governor emphasized that:

1.            The proceeds from the converted gold remain part of Ghana’s international reserves

2.            The sharp decline in gold holdings does not represent a loss of national assets, but a change in reserve composition in line with best practice

From a central banking and portfolio management perspective, this explanation is coherent. Reserve diversification is standard practice (just as diversification in any investment portfolio) and overconcentration in any single asset, as gold also carries risk.

Where the Narrative Still Breaks Down

While the Governor’s explanation clarifies why gold was sold, it inadvertently exposes the weakness in the broader GoldBod narrative.

If foreign exchange injected into the economy were primarily being generated by GoldBod operations, there would be little need for the central bank to reduce its exposure to gold in order to boost foreign currency reserves.

The fact that gold had to be converted into FX to rebalance reserves suggests that FX reserve growth is being supported by asset conversion and external inflows, not by an independent, self-sustaining GoldBod FX pipeline as Ghanaians are made to believe.

Put differently, selling gold to obtain foreign exchange is not the same as generating new foreign exchange capacity. It improves liquidity and flexibility in the short run, but it draws down a real asset whose value has been rising sharply in recent years.

This distinction matters. Asset conversion can support reserve adequacy temporarily. Structural FX generation comes from exports, remittances, and sustained balance-of-payments surpluses. Conflating the two risks overstating the role of GoldBod and understating the true drivers of Ghana’s improving external position.

A Question That Still Demands an Answer

The Bank of Ghana’s actions may be defensible on technical reserve management grounds. But when placed alongside the public messaging around GoldBod, a fundamental contradiction remains.

I will end everything with a question I asked my good friends Kingsford Duodu Adane and Afari Sadat Saeed Samuel in our discussion yesterday. I believe readers can also help with a response.

 If GoldBod is bringing in all the necessary FX needed as we are made to believe, why would BOG sell an asset whose value has been on the rise in recent years?