The Minister for Energy and Green Transition, John Jinapor, has strongly backed the purchase of gold as a strategic measure to bolster the economy.

According to him, leveraging gold-backed foreign exchange (forex) can provide essential financial support not only to Bulk Distribution Companies (BDCs) but also to Independent Power Producers (IPPs) and other critical sectors.

Speaking on JoyNews' PM Express on Tuesday, March 18, he argued that this will help stabilise the local currency and introduce a greater degree of predictability into the financial system.

"I fully endorse the purchase of gold and using that forex to backstop not just the BDCs, but even the IPPs and other critical sectors of the economy, in order to stabilise the currency and bring about a high level of predictability," Mr Jinapor stated.

He explained that the initiative is a prudent economic move because when gold is purchased and exported, the government gains a firmer grip on the forex inflows.

However, he acknowledged that the previous system had significant inefficiencies, primarily due to excessive middlemen within the process.

To address these concerns, Mr Jinapor emphasised the need to eliminate unnecessary intermediaries while integrating key private sector stakeholders such as the BDCs and Oil Marketing Companies (OMCs).

"...You want to bring in the private sector players, the BDCs and the OMCS, around the table, so that there is a high level of transparency," the Minister said.

He revealed that currently, the gold purchase policy has been suspended to allow for a comprehensive review.

"So currently, it’s been suspended, performing a joint committee, which will be jointly chaired by the Deputy Minister of Finance and the Deputy Minister of Energy. They will sit around with all the players and develop a proper road map, so that we can have a working road map that serves both the government and the private sector, and also to avoid a situation where, under the previous administration, the Bank of Ghana was taking a major hit."

Mr Jinapor also stated the financial setbacks suffered under the previous administration, noting that the Bank of Ghana incurred massive losses, estimated to be around a billion Ghanaian cedis.

He stressed that while past policies may have addressed certain economic needs, they also placed significant strain on other financial arms of the government.

"So far, our record shows that the Bank of Ghana incurred huge losses, almost about a billion thereabouts. And so you might satisfy one arm, but then it’s been taken through the other arm.

"We don't want that. We want a workable, efficient system that protects both governments and the private sector players and makes that forex available," he added.

The Minister reaffirmed that the new approach will prioritise sustainability and accountability, ensuring that the forex generated from gold exports is used effectively to strengthen key sectors of the economy.