Vice President, Dr. Mahamudu Bawumia has urged African Central Banks to partner with the mining sector and build up their gold reserves in order to withstand the economic shocks in the wake of the Covid 19 pandemic and the Russia-Ukraine conflict.

The Vice President made this known on Wednesday, at the West African Mining and Power Exhibition and Conference (WAMPOC/WAMPEX) in Accra.

Bawumia explained that the aftermath of these two challenges will result in a redefinition of the global economic architecture due to disruptions in supply chains and drastically reduced access to essential items.

This calls for greater self-reliance, from producing own medicines to enhancing agriculture production. But the greatest emphasis should be on building up their gold reserves in order to protect the value of their currencies and provide balance of payment support.

Dr Bawumia bemoaned the fact that despite an endowment of several different minerals, and a long history of mining, African countries have very little in terms of reserves and their currencies have little solid backing to ensure stability.

“The other day I was looking at some data in terms of our gold reserves and looking at Ghana at that time, the data was indicating that we’re the 6th largest producer of gold in the world. So I came back to look at our foreign exchange reserves in terms of gold reserves in the central bank. And when I went down the data we ended up about number 79 in the world in terms of gold reserves.

“And that situation was very much the case for many of the African countries in terms of the large gold producers. If you look at the highest gold reserves in the world, for example, in terms of the Central Bank Holdings, the United States has about over 8000 tonnes, Canada, Germany and so on about 2000 tonnes. In Ghana, our reserves were 8.7 tonnes, as a major gold producer. And this is the case when I thought South Africa will be even much more significant, but it wasn’t much more significant and I was a bit surprised about that.

“I mean we’ve been mining for over 100 years and one would have thought that at least our gold reserves would be much more significant because of the role the gold reserves play in stabilizing currencies and providing balance of payment support.”

On Local purchases, He commended the Bank of Ghana for implementing the policy of buying locally-produced gold to build up our reserves, and challenged other African central banks in similar gold mining countries to design and implement a clear policy towards local gold purchases “because it strengthens our economies, it strengthens our reserves. This strategy should not only be applicable to gold, but other minerals as well. Ghana’s recent discovery of lithium in commercial quantities should be leveraged to create battery manufacturing and building an EV market here. And we should be in that business so that we see the entire value chain operating here in Ghana.”