Prof. Peprah backs Gold Board but urges Ghana to plan for tougher times.

An Associate Professor of Finance at Andrews University in the United States has expressed support for Ghana’s proposed Gold Board but cautioned that the country must be ready for a potential slump in global gold prices. Speaking on PM Express on Joy News on Wednesday, Prof. William Kwasi Peprah described the Gold Board concept as a positive step. However, he emphasised that its long-term effectiveness would depend on strong implementation and prudent financial safeguards.

He argued that Ghana should establish a dedicated stabilisation fund for gold, similar to existing buffers for cocoa and petroleum, to cushion the economy against commodity price volatility. According to him, leaving gold out of such arrangements would be a mistake, particularly given its growing importance to the country’s export earnings.

While acknowledging that gold prices are currently on an upward trajectory, Prof. Peprah warned that commodity booms are often temporary. He stressed that Ghana must not assume prices will rise indefinitely and should instead prepare for a downturn.

Explaining the drivers behind the recent surge, he noted that gold markets are typically influenced by global uncertainty, inflation trends and currency movements. Heightened geopolitical tensions and economic instability, he said, have pushed investors toward gold as a safe haven. At the same time, moderate inflation projections from international institutions and the weakening of the US dollar have further encouraged investors to increase their gold holdings.

Prof. Peprah described the present high prices as a windfall opportunity and urged authorities to save part of the revenue generated from gold sales. He recommended that the Gold Board, the Bank of Ghana and the government collaborate to create a ring-fenced fund financed by proceeds from gold transactions. Such a reserve, he explained, would allow the country to support the gold industry when prices inevitably decline.

Although he welcomed efforts to refine gold locally to enhance value addition, he maintained that value addition alone would not shield the sector from global price swings. A commodity stabilisation fund dedicated to gold, he insisted, remains essential.

He also called for a careful review of the Gold Board’s financing model to prevent future challenges. Noting that the initiative has depended largely on government funding — with some pledged resources reportedly not fully disbursed in 2025 — he warned that sustainable financing structures must be put in place. He added that the Bank of Ghana is expected to step back from directly financing gold trade activities.

Prof. Peprah referenced provisions allowing the Gold Board to receive advance payments from buyers but cautioned that such arrangements must be properly structured to avoid financial strain. Without careful planning, he warned, the institution could face challenges similar to those experienced by other state commodity boards.

He further cautioned that excessive reliance on gold exports without adequate buffers could expose Ghana’s trade balance to serious risk if prices fall sharply.