Associate Professor of Finance at Andrews University, Prof. William Kwasi Peprah, says the Bank of Ghana is set to exit financing for the gold trade, a development he believes will increase pressure on the operational and funding model of the proposed Gold Board.

Speaking on Joy News’ PM Express on Wednesday, Prof Peprah described the Gold Board concept as “very good,” but cautioned that the financing structure must be tightened quickly to prevent the new arrangement from sliding into the kind of challenges currently associated with COCOBOD.

“The financing model for Gold Board also needs to be looked at a little bit,” he said, warning that the institution has already faced difficulties accessing promised government funding.

He noted that the Gold Board has relied on support from the Government of Ghana, but “the amount they promised were not fully released in 2025,” and with “Bank of Ghana… going to exit in financing gold trade,” the new structure will have to find alternative ways to stay afloat.

Prof Peprah said the law establishing the Gold Board provides an option that should now be explored more seriously. “In the law, it allows them to take money in advance from whoever needs gold, and then be able to give them the gold,” he explained, adding that the model must be examined carefully to ensure sustainability.

He also advocated for Ghana to establish a gold stabilisation account, similar to those already in place for cocoa and petroleum.

“If the Gold Board will work, we need another stabilisation account for the gold,” he stressed.

Prof Peprah said Ghana must not treat the current rise in gold prices as permanent.

He explained that gold is largely driven by three factors: fear, inflation, and currency hedging. He pointed to growing global uncertainty as a major reason prices have surged.

“We currently have fear… so many things happening in the world, which makes investors uncertain. So that is why we are seeing the gold price really, really moving up,” he said.

He added that while inflation projections from the IMF and the World Bank are expected to moderate, the weakening of the US dollar has also prompted investors to turn to gold. “We’ve noticed that the US dollar is devaluing, and that’s why we see investors moving into gold,” he noted.

With Ghana benefiting from what he described as a “windfall,” Prof Peprah urged authorities to prepare for the possibility of falling prices.

“Now that we are having this windfall, we should be able to establish another stabilisation fund purposely for gold… to guard against initial [shocks] that will come in,” he said.

He warned that without a stabilisation buffer, Ghana could face serious trouble if gold prices decline. “If the price starts to drop, it’s not really going to affect the economy,” he said, explaining that the stabilisation fund would protect the industry and provide support when needed.

He also drew a clear distinction between a revolving fund and a stabilisation fund. “They have a revolving fund. Revolving fund account is not the same as stabilisation fund account,” he said.

Prof Peprah concluded that Ghana must build a long-term safety net around gold revenues, warning that if the country fails to plan properly, “our trade balance will move into a very struggling position.”