Vice President Dr. Mahamudu Bawumia has revealed his plan to implement a new exchange rate system that would tie the Ghana cedi to gold.

He explained that this approach is designed to strengthen the cedi’s value against major currencies, thus improving exchange rate stability.

Addressing the opening of the Royal Ghana Gold Limited in Accra, Ghana’s first gold refinery, Dr. Bawumia stated that he intends to pursue this plan if elected in the upcoming general elections.

“I would like to propose a new foreign exchange regime management act for Ghana next year in which the value of the cedi will be anchored to gold. This will enhance exchange rate stability,” the vice president said on August 8, 2024.

The proposal by Dr. Bawumia, if adopted, will follow suit with Zimbabwe, which has backed its currency with gold.

Known as the ZIG, the adoption of the gold-backed unit has helped in overhauling Zimbabwe’s currency regime in the wake of persistent depreciation of the Zimbabwean dollar to the US dollar.

Additionally, due to growing geopolitical tensions, many African countries have instituted measures to build their gold reserves to anchor their respective exchange rate regimes.