I’ll solidify ‘Gold for Forex’ programme to stabilise cedi — Bawumia

The flagbearer of the New Patriotic Party (NPP), Dr. Mahamudu Bawumia, has pledged that his government will formalize the “Gold for Forex” programme to stabilise Ghana’s exchange rates.

At the NPP 2024 Manifesto launch in Takoradi on Sunday, August 18, Dr. Bawumia highlighted that the proposed foreign exchange policy would aim to ensure the long-term stability of the Cedi.

He explained that under the proposed framework, all significant demand for foreign exchange would be channelled through the Bank of Ghana’s gold purchase programme.

This would allow the central bank to use its gold reserves to meet the demand for foreign currency, thereby stabilising the local currency.

Dr. Bawumia emphasised that anchoring the Cedi on gold would not only control the exchange rate but also free up additional forex reserves for other national needs.

“I am proposing a framework which we will discuss with the central bank, of course, and we will see where. But the framework that I am proposing is very simple. Having looked at all that we have done, all significant demand for gold should be channelled through the Bank of Ghana’s gold purchase programme,” he stated.

He further pledged to foster a business-friendly environment by working with the private sector to build roads, school infrastructure, and hostels, as well as to acquire buses for schools.

He also emphasized his commitment to supporting and expanding businesses with a new tax regime designed to stimulate economic growth.

“To increase government tax revenue, we have to reform and refocus the Ghana Revenue Authority (GRA) towards broadening the tax base.

“Estimates suggest that revenues amounting to  13% of GDP (or $24 billion in 2023) are not collected because people are outside the tax net,” Dr Bawumia said.

“We want a tax regime that is easy to understand, easy to comply with and easy to enforce and that is not subject to so much discretion. Many individuals and businesses find our tax system cumbersome and confusing.”

“My government will introduce a very simple, citizen and business-friendly flat tax regime. A flat tax rate for individuals and SMEs, which constitute over 80 per cent of all businesses in Ghana, with appropriate exemption thresholds set to protect the poor.”

Dr. Bawumia further announced that his government plans to overhaul the Value Added Tax (VAT) system by consolidating all levies into a single line item.

“My government would like to start the new tax system on a clean slate,” he said.

“My government will provide a tax amnesty, a complete exemption from the payment of taxes for a specified period and the waiving of interest and penalties up to a certain year to individuals and businesses for failures to file taxes in previous years so that everyone will start afresh.”