The recent appreciation of the Ghanaian Cedi against the US dollar and other major trading currencies has sparked political debates and credit-taking contests.

In a statement issued by Dr. Razak Kojo Opoku, Founding President of the UP Tradition Institute, the think tank sought to clarify the facts surrounding the currency’s recovery, emphasising that the now-suspended “Gold for Oil” policy played a minimal role in the development.

According to the Institute, it is crucial to distinguish between two different initiatives — the “Gold for Oil” policy and the “Gold for Reserves” programme.

“The ‘Gold for Oil’ policy, implemented by the Akufo-Addo administration, was a targeted barter strategy designed to stabilise domestic fuel prices by using domestically mined gold to pay for imported petroleum products, thus reducing the need for US dollars,” the statement explained.

Dr. Opoku noted that although the policy had partial success in stabilising fuel prices between 2022 and March 2025, it failed to make any meaningful impact on the depreciation of the Cedi during the same period.

Conversely, the “Gold for Reserves” programme — a broader and longstanding policy of the Bank of Ghana — focuses on building foreign exchange reserves, offering a buffer against inflation, and ensuring currency stability.

This policy continues to be in operation, even after the “Gold for Oil” initiative was suspended due to implementation, operational, and financial challenges, as announced by the Bank of Ghana Governor Dr. Johnson Asiama.

The Institute further outlined a comprehensive list of factors contributing to the Cedi’s recent gains, asserting that no single policy can claim sole credit.

The major contributing factors identified include:

Fiscal and Monetary Reforms under the Mahama administration.

Favourable Global Economic Conditions, particularly the US-China trade war.

Ghana’s IMF Programme, including the $3 billion Extended Credit Facility initiated by the Akufo-Addo government.

Ongoing Debt Restructuring started in 2022 and was continued by the current administration.

S&P Global Ratings Upgrade, which elevated Ghana’s status from selective default to CCC+.

Bank of Ghana’s Forex Interventions, notably a $490 million injection in April 2025.

High Global Commodity Prices, including gold at $3,400 per ounce and cocoa at $10,000 per ton.

Operations of the Ghana Gold Board (GoldBod), enhancing the “Gold for Reserves” policy.

Decline in the US Dollar Index (DXY).

Increased Gold Reserves, now valued at approximately $3.6 billion.

Based on these combined factors, the Institute apportioned the Cedi’s appreciation as follows:

50%: Mahama government’s reforms and policy interventions.

25%: Contributions from the Akufo-Addo administration and former finance ministers.

15%: IMF and S&P rating upgrades.

9%: Favourable global economic conditions.

0.5–1%: Contribution from the suspended “Gold for Oil” policy.

“The ‘Gold for Oil’ policy’s role in the Cedi’s recent appreciation is statistically insignificant on a scale of 100%,” Dr. Opoku stated.

To safeguard the long-term stability of the Cedi, the UP Tradition Institute proposed several policy measures for consideration by the Mahama government and future administrations:

Enactment of a “Ghana Gold Reserve Act”, placing gold stock management under the direct supervision of the Bank of Ghana.

Creation of an “Exchange Stabilisation Fund (ESF)”, to manage forex value fluctuations.

Amendments to the Foreign Exchange Act, 2006 (Act 723), allow the President to set the gold value of foreign currencies via proclamation through the Ministry of Finance.

In conclusion, the Institute stressed the need for a depoliticised and evidence-based discussion around economic recovery and the appreciation of the Ghanaian Cedi.

“It is very pedestrian for anyone to single out one initiative as the causality of the Cedi appreciation,” the statement concluded.