Andrews University Professor Urges Gold Stabilisation Fund Amid Price Boom

An Associate Professor of Finance at Andrews University has endorsed Ghana’s Gold Board initiative but warned that the country must prepare for a potential downturn in global gold prices.

Prof. William Kwasi Peprah, speaking on PM Express on Joy News, described the policy idea as sound but stressed that its long-term success depends on careful operationalisation and financial planning.

“So the gold board idea is very good,” he said.

However, he emphasised that Ghana must build adequate buffers to manage future commodity shocks.

Call for Dedicated Gold Stabilisation Account

Prof. Peprah pointed to Ghana’s existing commodity stabilisation structures for cocoa under Ghana Cocoa Board and for petroleum revenues, arguing that gold — as a major export earner — should not be excluded.

“If the gold board will work, we need another stabilisation account for the gold,” he stated.

According to him, although gold prices are currently rising, history shows that commodity booms do not last forever.

“We know from history, gold price… has always been going up… [but] we must watch it carefully and make sure that… the price… will still start to come down.”

What Is Driving Gold Prices?

Prof. Peprah explained that gold trading is shaped by three key factors:

• Fear (global uncertainty)

• Inflation

• Currency hedging

“We currently have fear… so many things happening in the world, which makes investors uncertain. So that is why we are seeing the gold price really, really moving up,” he said.

He added that currency movements — particularly weakness in the US dollar — are encouraging investors to shift into gold as a hedge.

“We’ve noticed that the US dollar is devaluing, and that’s why we see investors moving into gold,” he noted.

Treat Current Prices as a Windfall

Prof. Peprah advised Ghana to treat the current high gold prices as a windfall and save part of the proceeds in a dedicated fund.

“So now that we are having this windfall, we should be able to establish another stabilisation fund purposely for gold.”

He urged the Ghana Gold Board, the Bank of Ghana and government to create a gold-specific stabilisation fund financed from gold sales revenue.

“When the price starts to drop, we’ll be able to use it [to] support the gold industry in Ghana,” he explained.

While welcoming Ghana’s refinery plans to boost value addition, he maintained that structural buffers remain essential.

“It’s good. We are doing a refinery to add value, but that commodity fund for gold is needed,” he said.

Financing Model Must Be Carefully Structured

Prof. Peprah also raised concerns about the Gold Board’s financing framework. He noted that although the Board has relied on government funding, promised allocations were not fully released in 2025, and the central bank is expected to exit direct gold trade financing.

He referenced a legal provision allowing the Gold Board to accept advance payments from buyers and later supply gold — a model he believes requires close scrutiny.

“It allows them to take money in advance from whoever needs gold, and then be able to give them the gold.”

He warned that without proper safeguards, the structure could mirror challenges faced by Ghana Cocoa Board (COCOBOD).

“If we fail on gold… our trade balance will move into a very struggling position,” he cautioned.

The remarks underscore growing debate about how Ghana should manage gold revenues sustainably while reducing exposure to commodity price volatility.