NDC benefiting from Bawumia’s forex reserve strategy — Gideon Boako

The Member of Parliament for Tano North, Dr. Gideon Boako, has defended the previous New Patriotic Party (NPP) administration’s management of Ghana’s foreign exchange reserves, arguing that the current National Democratic Congress (NDC) government is benefiting from measures implemented under the leadership of then Vice President Dr. Mahamudu Bawumia.

According to Dr. Boako, Ghana’s economic crisis in 2022, triggered partly by the Russia-Ukraine war, led to the country’s decision to enter an International Monetary Fund (IMF) programme, with the rebuilding of foreign exchange reserves becoming a key condition.

He explained that, as part of the programme, the Bank of Ghana’s direct monthly foreign exchange intervention was initially capped at US$80 million before being reduced to US$60 million.

“The NPP government stayed disciplined and complied with this cap. Because of that commitment, Ghana gradually built its reserves and by end-2024 had exceeded the IMF threshold,” Dr. Boako stated.

He said the achievement paved the way for the IMF to lift the restriction in 2025, giving the current NDC administration greater room to intervene in the foreign exchange market.

“That effort is what enabled the IMF to lift the cap in 2025. That is what is allowing the new NDC government to intervene heavily in the market today without restriction,” he said.

Dr. Boako argued that despite the intervention restrictions, the country still required substantial foreign exchange to finance essential imports, including fuel, medicines, spare parts, food and beverages, while also enabling businesses to repatriate profits.

He said Dr. Bawumia’s response was to leverage Ghana’s gold resources through initiatives such as the Domestic Gold Purchase Programme and Gold-for-Oil programme to strengthen reserves and ease pressure on the limited supply of dollars.

“Dr. Bawumia's solution was to use Ghana's own gold through the Domestic Gold Purchase Programme and Gold-for-Oil to boost reserves, pay for essential imports and reduce pressure on the limited dollars,” he said.

According to the Tano North MP, the initiatives provided a solution to a longstanding challenge that has affected the cedi under successive governments.

“He did not waste the crisis. He found a solution to a problem that has haunted the cedi since the First Republic and under every government,” Dr. Boako added.

He further accused the NDC government of taking credit for measures he said were initiated under the previous administration, particularly efforts to stabilise the cedi, control inflation and reduce interest rates.

“It is that solution the NDC is now using to stabilise the cedi, control inflation and bring interest rates down, and claiming credit for,” he stated.

Dr. Boako also disputed claims that the Bank of Ghana sold an average of US$250 million per month in 2024, arguing that the figure conflates direct market intervention with other foreign exchange sales, including auctions and other windows.

He maintained that the increased foreign exchange flows and accumulation of reserves were achieved without resorting to Eurobond borrowing, with gold-purchase arrangements playing a significant role.

“The NDC's claim that the Bank of Ghana sold an average of $250 million per month in 2024 confuses total forex sales which includes auctions and other windows with direct market intervention,” he said.