A New Patriotic Party lawmaker has criticized the government and Bank of Ghana’s continued intervention in the foreign exchange market, claiming the National Democratic Congress administration has injected $4.55 billion since taking office in January 2025.
Kennedy Osei Nyarko, Member of Parliament for Akyem Swedru, argued in a social media post that such funds could have been invested in infrastructure projects that might generate higher returns over time. He described the forex interventions as repeating past mistakes that weakened Ghana’s economy.
The MP suggested the amount could construct multiple major projects including the Accra to Kumasi road, the Eastern Railway Line from Accra to Kumasi, the Western Railway Line from Takoradi to Kumasi, and the Winneba to Cape Coast road.
His criticism comes as the Bank of Ghana announced plans to sell up to $1.15 billion in October 2025 through foreign exchange intermediation under its Domestic Gold Purchase Programme. The sales will be conducted through twice weekly, price competitive auctions open to all licensed banks.
Speaking at a meeting with commercial bank executives in Accra, Bank of Ghana Governor Dr. Johnson Asiama said the auctions would operate on a spot basis with no special conditions or earmarked allocations, ensuring fair and transparent access for all market participants.
The Domestic Gold Purchase Programme itself is not new but the scale of October’s planned forex sales represents a significant expansion. The central bank purchases gold from local miners using cedis, then converts the gold to foreign exchange which it sells to banks to support cedi stability.
International Monetary Fund data showed the Bank of Ghana intervened with $1.4 billion in the first quarter of 2025, contributing to significant cedi appreciation. The local currency strengthened from GH¢16 to GH¢10.40 against the US dollar on the interbank market during that period.
The cedi’s appreciation helped reduce inflation and created expectations for monetary policy easing. However, opposition figures like Kennedy Osei Nyarko argue the interventions consume resources that could fund development projects with longer term economic benefits.
The debate reflects broader disagreements about exchange rate management strategies. Some economists support central bank interventions to stabilize currency volatility, maintain confidence and control imported inflation. Critics contend interventions drain foreign reserves without addressing underlying structural issues driving currency weakness.
The Importers and Exporters Association of Ghana commended the Bank of Ghana’s decision to inject $1.15 billion into the forex market, describing it as a bold move that would improve liquidity and support businesses requiring foreign currency for operations.
Ghana’s foreign exchange challenges stem from multiple factors including limited export diversification, high import dependence, debt service obligations and periodic confidence crises. The country relies heavily on gold, cocoa and oil exports while importing fuel, machinery, consumer goods and intermediate inputs.
Whether forex interventions represent sound policy or wasteful spending depends partly on objectives and outcomes. If interventions successfully stabilize the currency, reduce inflation and create conditions for growth, defenders argue they serve important macroeconomic purposes.
However, if interventions merely delay inevitable currency adjustments while depleting reserves, critics have stronger grounds for questioning the approach. The effectiveness also depends on whether interventions address temporary volatility or attempt to maintain unsustainable exchange rates.
Kennedy Osei Nyarko has served as MP for Akyem Swedru since 2016 and previously held the position of Deputy Minister of Agriculture from November 2017. He has been vocal on economic policy issues, previously questioning government funding plans for the 24 hour economy initiative and cautioning against backdoor tax increases.
The MP’s infrastructure argument assumes the same dollars used for forex interventions could alternatively fund construction projects. However, infrastructure development typically requires cedis for local costs, foreign exchange for imported materials and equipment, and sustained budgetary allocations over multiple years.
The Bank of Ghana’s forex sales under the gold purchase programme differ from direct reserve depletion because the central bank acquires foreign exchange through gold purchases rather than simply drawing down existing reserves. This distinction matters for assessing sustainability of interventions.
Ghana completed a domestic debt restructuring in 2023 and reached agreements with external creditors to restore debt sustainability. The country’s ability to accumulate foreign reserves depends on export performance, remittances, foreign investment flows and official financing.
Whether October’s $1.15 billion forex sale and previous interventions totaling $4.55 billion as claimed by the MP represent prudent policy or resource misallocation will likely remain politically contested. Both sides can point to data supporting their positions regarding currency stability, inflation control and development priorities.
