In a bold move reflecting the BRICS bloc’s de-dollarization strategy, Ghana’s Vice President Mahamudu Bawumia has announced plans to back the nation’s currency, the Cedi, with gold. The policy, aimed at stabilizing Ghana’s economy, could mark a significant shift in the country’s monetary approach. While still in the proposal stage, this initiative could align Ghana with the BRICS nations’ ongoing efforts to reduce reliance on the US dollar by adopting gold-backed and local currencies.
However, the decision has sparked debate among economists and financial experts within Ghana. Richmond Atuahene, a respected Ghanaian banking consultant, has voiced concerns about the potential pitfalls of adopting a gold standard for the Cedi. Atuahene argues that simply backing the currency with gold will not address the underlying issues of macroeconomic instability that have plagued the country.
“The success of a gold-backed Cedi depends on the government’s ability to maintain a stable and viable economy. Without addressing existing macroeconomic weaknesses, adopting a gold standard could reduce monetary policy flexibility and worsen economic instability,” Atuahene warned.
Ghana’s consideration of a gold-backed currency mirrors the broader BRICS strategy, which has seen the coalition of Brazil, Russia, India, China, and South Africa explore alternatives to the US dollar. While BRICS is reportedly planning to back its future currency with gold to challenge the global dominance of the dollar, the final decision on this development remains pending.
As Ghana contemplates this significant policy shift, the global financial community watches closely. The outcome could influence not only Ghana’s economic future but also the broader movement among emerging economies to seek alternatives to the dollar-dominated financial system.
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Credit: watcher.guru
