## Ghana’s Ambitious Move: Backing the Cedi with Gold
The African nation of Ghana is taking audacious steps to back its local currency, the Cedi, with gold. Vice President Mahamudu Bawumia has pledged to support this initiative as a solution to the nation’s economic instability. Although the policy is yet to be implemented, it could herald a new era in monetary standards. The plan draws inspiration from BRICS, which is looking to end reliance on the US dollar.
### A Leap Towards the Gold Standard
Ghana is now emulating the de-dollarization trend to stabilize its currency. By aligning with BRICS principles, Ghana aims to bolster its financial structure. However, this move raises many questions and concerns among financial experts.
**Also Read: [More Than 50 Countries Could Accept BRICS Payment System](https://watcher.guru/news/more-than-50-countries-could-accept-brics-payment-system)**
### Economist Raises Doubts Over Gold-Backed Cedi
Despite Ghana’s ambitious plans, not everyone is convinced. Richmond Atuahene, a Ghanaian banking consultant, has serious reservations. He argues that simply backing the Cedi with gold will not resolve the inherent economic instability.
**Also Read: [47 Countries Ready To Join the BRICS Alliance](https://watcher.guru/news/47-countries-ready-to-join-the-brics-alliance)**
“The gold standard’s success in Ghana hinges on the government’s commitment to a stable and viable economy,” Atuahene explains. He further elaborates that if macroeconomic weaknesses are not addressed, adopting a gold standard might exacerbate the very issues it intends to mitigate.
**Also Read: [New Country Shows Interest To Join BRICS Before 2024 Summit](https://watcher.guru/news/new-country-shows-interest-to-join-brics-before-2024-summit)**
### Challenges Facing the BRICS Gold-Backed Currency Vision
Meanwhile, even BRICS is planning to back its yet-to-be-released currency with gold to challenge the dominance of the US dollar. However, a definitive decision on this matter is still pending.
#### Points of Contemplation:
1. **Government Commitment**: Sustaining a gold-backed currency requires unwavering government dedication to maintaining economic stability.
2. **Flexibility in Monetary Policy**: A shift to the gold standard may restrict monetary policy flexibility, posing heightened risks during economic downturns.
3. **Addressing Macroeconomic Imbalances**: Without resolving broader economic imbalances, a gold-backed currency might not deliver the promised stability.
**Read here** to know how many sectors in the US will be affected if BRICS ditches the dollar for trade.
### Conclusion
Ghana’s consideration of a gold-backed Cedi marks a significant and bold shift in its economic strategy. While it offers potential benefits, the move is fraught with complexities and challenges. The success of such a venture will largely depend on the Ghanaian government’s ability to address broader economic weaknesses and maintain stability.
