Ghana’s adoption of Gold-for-Reserves (G4R) program represents a non-traditional macroeconomic intervention aimed at mitigating foreign exchange shortages, stabilising the national currency, and safeguarding energy security.
While the program has attracted criticism, particularly following the International Monetary Fund’s (IMF) reporting of approximately US$214 million in accounting losses, the constitutional legality of this initiative must be assessed independently of its fiscal outcome( s)
My objective is to determine whether the program aligns with Ghana’s 1992 Constitution and the Bank of Ghana’s legal mandate.
- State Ownership and Control of Mineral Resources
According to Article 257(6) of the 1992 Constitution, “every mineral in its natural state” is vested in the President on behalf of, and in trust for, the people of Ghana. This provision establishes unequivocal state ownership over gold and grants the State broad discretion in determining how mineral resources are utilised in pursuit of the public interest. (Here, my emphasis is on public interest). The use of gold as a strategic asset in macroeconomic management, whether through exchange for petroleum products or conversion into foreign exchange reserves, falls squarely within the scope of lawful state control over mineral resources. The Constitution does not restrict the purposes for which state-owned minerals may be deployed, provided such deployment serves national development objectives. - Mandate of the Bank of Ghana
The Bank of Ghana’s constitutional authority is grounded in Article 183. Article 183(1) designates the Bank as Ghana’s central bank, while Article 183(2)(a) mandates it to “maintain the stability of the currency.”
Reserve management, including the accumulation, valuation, and deployment of foreign exchange and gold reserves, is therefore an internationally recognised central banking function. Consequently, the Gold-for-Reserves program, designed to convert domestically produced gold into official foreign exchange reserves, constitutes a legitimate exercise of the Bank’s constitutional and statutory mandate. Similarly, in the immediate past, the Gold-for-Oil program, though unconventional, may be legally characterised as an emergency reserve-preservation mechanism intended to protect the currency and ensure macroeconomic stability during a period of acute balance-of-payments stress. - Parliamentary Oversight and Public Finance Considerations
A potential constitutional concern arises in relation to Articles 174 and 178, which regulate public funds, parliamentary appropriation, and withdrawals from the Consolidated Fund. Critics argue that the utilisation of gold, which is a public asset without explicit parliamentary approval, could undermine legislative oversight. However, a critical legal distinction must be drawn between:
fiscal expenditure, which requires parliamentary appropriation; and
monetary and reserve operations, which are traditionally conducted by central banks with a degree of operational independence. Where gold transactions are executed on the Bank of Ghana’s balance sheet as part of reserve management, rather than as direct government spending, they are more appropriately classified as monetary operations. On this basis, the program, as far as I am concerned do not, in itself, constitute a violation of parliamentary control over public finances, though they do raise legitimate concerns regarding transparency and reporting. - IMF Critique and Its Legal Significance
The IMF’s reporting of US$214 million in losses under the Gold-for-Reserves program reflects prudential, accounting, and risk-management considerations rather than findings of illegality. IMF program conditionality discourages “quasi-fiscal operations” by central banks, particularly where such operations expose public institutions to commodity price volatility.
Importantly, IMF assessments do not possess constitutional or legal supremacy over Ghana’s domestic legal order. While IMF concerns are relevant for policy sustainability and external financing credibility, they do not render the program unconstitutional or unlawful under the laws of Ghana. - Comparative and International Perspective
Comparative practice demonstrates that the strategic use of gold is not unique to Ghana. States such as Russia and China have increasingly relied on gold accumulation and deployment to hedge against currency instability and external financial shocks. These practices are evaluated primarily on governance and effectiveness grounds, rather than constitutional permissibility.
In international economic law, the principle of permanent sovereignty over natural resources further supports Ghana’s discretion to utilise gold in pursuit of macroeconomic stability.
Conclusion
Ghana’s Gold-for-Reserves program implemented by the government of Ghana is constitutionally defensible under Articles 257 and 183 of the 1992 Constitution as lawful exercises of state resource sovereignty and central bank reserve management.
The IMF reported losses represent accounting and prudential concerns, not constitutional breaches. The principal legal challenges lie not in the existence of the program, but in ensuring adequate transparency, accountability, and alignment with best practices in central bank governance.
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