A senior Ghanaian development economist has called on African governments to rethink their foreign reserve strategies and prioritise gold holdings over United States dollar-denominated assets, warning that growing geopolitical risks make heavy reliance on the dollar increasingly vulnerable.

Frank Bannor, a Development Economist and Senior Research Fellow at the Institute of Economic Research and Public Policy (IERPP), made the recommendation during an interview with Sputnik Africa.

He argued that even advanced Western economies are gradually diversifying their reserve portfolios toward gold, a trend African countries should take seriously given their exposure to sanctions, visa restrictions and other financial limitations.

“If the so-called bigger economies… are diversifying, moving away from the dollar to gold-denominated assets, then how much more African countries, who are highly susceptible not just to sanctions, but also to visa restrictions and other financial constraints?” he questioned.

Dr Bannor, who also lectures at the Ghana Institute of Management and Public Administration, said uncertainty in global markets has made dollar-based investments less dependable. In his view, continuing to accumulate dollar reserves alone is no longer a prudent strategy.

Instead, he described gold as a more stable and flexible store of value that can be easily converted during emergencies.

He noted that gold’s universal acceptance allows countries to use it for trade or as collateral, pointing to Ghana’s previous gold-for-oil arrangements as an example of how the commodity can support essential imports during periods of pressure.

“In terms of liquidity, gold is highly liquid in all senses because people are ready to accept it as a form of payment. It is clearly the right option to go,” he said.

Dr Bannor concluded by urging policymakers across the continent to diversify their reserves, stressing that stronger gold positions could better shield African economies from external shocks and financial restrictions.