Ghana’s ambitious drive to rebuild its foreign-exchange reserves is entering a more difficult phase as a sharp correction in international gold prices threatens to reduce the value of the country’s most important source of export earnings and foreign exchange.
Gold was trading at about US$4,144 per troy ounce on September 29, 2026, after falling to around US$4,111 the previous day. That represents a decline of roughly 26 percent from its January 29 peak of US$5,594.82, although the fall is approximately 20 percent from the US$5,000-plus levels that had prevailed earlier in the year.
For Ghana, the correction is particularly consequential because gold has become overwhelmingly dominant in the country’s external sector. Gold generated US$14.86 billion of Ghana’s US$22.41 billion export earnings in the eight months to August this year, accounting for about two-thirds of total exports. Gold receipts were US$11.18 billion in the corresponding period of 2025.
The timing could hardly be more significant. Ghana has adopted the Ghana Accelerated National Reserve Accumulation Policy (GANRAP), under which the government aims to build gross international reserves to the equivalent of 15 months of imports by the end of 2028. Finance Minister Dr Cassiel Ato Forson has described the policy as an effort to build an “economic war-chest” capable of protecting Ghana against external shocks and reducing dependence on emergency external financing.
The challenge is the distance still to be covered.
The latest data indicate that Ghana’s GIR rose from US$13.83 billion at end-2025 to US$14.16 billion in March 2026, before declining to US$12.94 billion at end-June and further to about US$11.07 billion at end-August. The August level represents a reduction of approximately US$3.1 billion from the March peak and reduced import cover from around 5.8 months in March to about 4.2 months in August. They subsequently increased to US$12.05 billion, or 4.5 months of import cover, by September 22.
However, even the latest improvement leaves Ghana with a substantial gap between its current reserve position and the 15-month GANRAP objective.
Bank of Ghana Governor Dr Johnson Asiama has consequently made reserve accumulation a central policy concern. At the September Monetary Policy Committee meeting, he warned that the weaker current account, declining reserves and the slowdown in GoldBod shipments required careful management of Ghana’s external buffers ahead of the traditional fourth-quarter increase in foreign-exchange demand.
“Rebuilding reserves will be a key priority for the Bank in the coming months indeed,” Dr Asiama said.
The gold-price correction makes that task more demanding because Ghana’s reserve-building strategy has increasingly been linked directly to gold.
Why the gold price has fallen
The immediate reason for the latest gold sell-off has been the dramatic rise in US interest rates and Treasury yields.
The benchmark 10-year US Treasury yield climbed above 5.2 percent in late September, reaching levels not seen since 2007, while the 30-year yield moved above 5.5 percent.
Gold does not pay interest or dividends. Consequently, when risk-free US government securities offer substantially higher yields, the opportunity cost of holding bullion rises.
The effect has been compounded by expectations that the US Federal Reserve could keep monetary policy tighter for longer. The surge in oil prices has reinforced those expectations because higher energy prices threaten to prolong US inflation.
Reuters reported that gold fell as much as 4 percent on September 28 as higher Treasury yields and expectations of further Federal Reserve tightening reduced investor appetite for the non-yielding metal.
The stronger US dollar has added another headwind because gold is dollar-denominated and therefore becomes more expensive for non-US investors when the dollar appreciates.
There has also been a reduction in speculative investment demand. Reuters has reported that money managers’ net-long gold positions had fallen to their lowest level since late July, while gold-backed exchange-traded funds recorded outflows.
The implications for Ghana
The potential impact on Ghana’s foreign-exchange earnings can be illustrated simply.
Gold exports of US$14.86 billion during January-August were achieved at substantially higher prices than the current market price. If, purely for illustration, the same physical quantity of gold exported during that period had been priced 20 percent lower, its export value would have been roughly US$2.97 billion lower too.
That is not a forecast of an actual US$2.97 billion loss: Ghana’s export volume, realized prices, hedging arrangements and shipment timing will differ. But it demonstrates the scale of Ghana’s exposure to bullion prices.
The physical-production response provides some protection. GoldBod says artisanal and small-scale mining purchases during the first half of 2026 were between 50 and 54 tonnes, while the sector was on course to exceed its record 104-tonne 2025 output.
GoldBod generated US$1.315 billion of foreign exchange in August alone, of which US$646.59 million was made available to the Bank of Ghana for reserve accumulation.
But higher volumes cannot completely neutralize a large price decline. More ounces have to be sold merely to generate the same dollar receipts.
Oil cannot provide compensation
Ghana might normally expect an oil-price surge to provide some offset. But this episode is different because Ghana is a net importer of petroleum products and crude-related energy requirements.
During the first half of 2026, Ghana’s crude-oil exports generated US$1.71 billion, while its oil import bill was approximately US$3.3 billion.
Consequently, higher global oil prices increase export receipts but simultaneously increase the import bill, transport costs, electricity-generation costs and production costs.
The Bank of Ghana’s July monetary-policy report captures the asymmetry: its commodity-price index showed the crude-oil sub-index rising 36.5 percent year-to-date, while the gold sub-index declined 1.8 percent and cocoa fell a much larger 27.6 percent during the period measured.
Governor Asiama has described the Middle East shock as double-edged, noting that higher commodity prices can support export earnings while higher energy and fertilizer costs feed into domestic inflation.
Cocoa cannot fill the gap either
Cocoa offers another source of foreign exchange, but production constraints prevent Ghana from fully exploiting higher international prices.
COCOBOD expects Ghana’s 2026/27 cocoa production to fall by at least 16 percent, reflecting adverse weather, disease, ageing farms, the natural production cycle and the destruction of farmland through illegal mining.
Although crop season cocoa export earnings increased to US$2.76 billion by August, from US$2.47 billion a year earlier, production constraints limit the extent to which higher prices can compensate for weaker gold receipts.
Trade surplus and cedi implications
So far, Ghana’s merchandise trade balance remains strong. The year-to-date surplus increased to US$8.86 billion by August, from US$6.69 billion a year earlier, because export growth continued to exceed import growth.
But the composition of that surplus makes it vulnerable.
If gold prices remain depressed while oil prices remain elevated, Ghana could experience simultaneous pressure from weaker mineral receipts and a larger energy import bill. A deterioration in the trade surplus would reduce the supply of foreign exchange available to the domestic market.
That matters for the cedi.
Already, Reuters reported in September that corporate demand for dollars, particularly from commerce and energy importers, was exceeding available supply, contributing to renewed pressure on the cedi.
The transmission mechanism is straightforward: fewer gold dollars entering the economy, combined with more dollars required for energy imports, narrows the foreign-exchange balance. If capital inflows do not compensate, pressure shifts to the exchange rate.
Will gain regain its shine?
The short-term outlook for gold has become substantially more uncertain.
Some analysts expect further downward price movement. Aakash Doshi, Head of Commodities at State Street Corporation, a global financial services and bank holding company, has warned that rising yields could push gold towards US$4,000 before a recovery.
Other forecasts remain considerably more optimistic. Christopher Louney, Director of Global Commodity Strategy and MENA Research at RBC Capital Markets, maintains a US$4,500-US$5,000 range for much of the remainder of 2026 and has a high-case projection of US$4,929 at year-end and US$5,296 in 2027.
Similarly, UBS Chief Investment Officer Mark Haefele expects gold to reach US$5,000 during the first half of 2027, although he acknowledges near-term risks.
For Ghana, therefore, the crucial variable is not simply whether gold eventually returns to US$5,000. It is how long it remains below that level.
A prolonged period around US$4,000-US$4,500 would materially reduce the foreign-exchange value of Ghana’s gold exports compared with the assumptions underpinning the country’s reserve-accumulation strategy. Conversely, a recovery towards US$5,000 would substantially improve the arithmetic.
For now, Ghana therefore faces an uncomfortable external-sector combination: gold prices are falling, US Treasury yields are rising, oil is becoming more expensive for a net energy importer, and cocoa’s production capacity is constrained.
That leaves the country increasingly dependent on maintaining high physical gold production, ensuring regular GoldBod shipments, controlling import growth, attracting non-commodity foreign-exchange inflows and preserving the credibility of its reserve-accumulation framework.
The Bank of Ghana’s latest message is consequently significant. As Dr Asiama put it, Ghana’s objective is to “build adequate reserves at all times” because reserves provide resilience against external shocks.
The gold-price correction means that achieving that objective will require considerably more than simply waiting for bullion prices to recover.
By: Toma Imirhe / businesspostonline
