Bawumia Blames NDC’s Gold Trading Strategy for $1.7bn Losses, Defends NPP Plan

Former Vice President of Ghana and New Patriotic Party (NPP) flagbearer, Dr Mahamudu Bawumia, has criticised the National Democratic Congress (NDC) government’s approach to the Gold-for-Reserves programme, insisting that the financial losses recorded could have been avoided if the current administration had followed the previous government’s proposed strategy.

Bawumia made the remarks while addressing NPP members during a town hall meeting in Tokyo, Japan, where he discussed Ghana’s gold reserve policy and the reported financial challenges associated with the programme.

According to the former Vice President, the Bank of Ghana has recorded significant losses through its gold operations because the current administration chose to trade gold rather than concentrate on accumulating the commodity to strengthen the country’s reserves.

He argued that the previous government’s intention was to use the programme primarily to build Ghana’s gold reserves instead of engaging in extensive gold trading activities.

Speaking on the issue, Bawumia maintained that adopting the NPP’s proposed approach would have prevented the losses currently being discussed.

“The Central Bank, through the Gold programme, has made losses of $1.7 billion. If they had followed the way that we had wanted to do the Gold-for-Reserves programme in terms of accumulating reserves, those losses would not have been made,” he stated.

He further explained that trading in gold comes with financial risks and operational costs, which could expose the country to losses depending on how the programme is managed.

“But once you decide to start trading in gold, you’ll make those losses. We are just at the beginning of things. We are asking everybody to be patient, and let’s watch what will happen,” he added.

Bawumia’s comments have brought renewed attention to the economic policies of the previous NPP administration and the decisions being taken by the current NDC government regarding Ghana’s gold reserves.

The Gold-for-Reserves programme was introduced to help the country accumulate gold, strengthen foreign exchange reserves and reduce pressure on the cedi.

However, the programme has faced scrutiny over the financial costs associated with purchasing and trading gold.

According to reports on the Bank of Ghana’s gold operations, the International Monetary Fund has also identified substantial losses associated with the Domestic Gold Purchase Programme, including costs linked to gold trading, service charges and exchange-rate differences.

The debate has therefore centred on whether the financial costs recorded outweigh the broader economic benefits of the programme, particularly its contribution to Ghana’s foreign exchange reserves.

Bawumia believes the current government should have maintained the reserve accumulation approach instead of adopting a trading strategy that he says has contributed to the losses.

His remarks are likely to generate further political discussions, especially as the NPP continues to scrutinise the economic decisions of the Mahama administration.

For now, the former Vice President has maintained that Ghana could have avoided the reported losses if the current government had followed the strategy proposed by his administration.

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