IMF gold sales worry Accra

Ghana’s government said on Wednesday that the decision by the International Monetary Fund (IMF) to sell gold so that it can provide more aid to poor nations could have a crippling effect on gold-producing countries, PANA reported. Minister of Energy and Mines Fred Ohene Kena said most gold producing economies were already reeling under a recent depreciation in gold prices and could not afford to experience another price fall. An assurance by IMF Managing Director Michel Camdessus that the fund would make every effort to ensure the sales do not unsettle the markets could not be guaranteed, PANA reported Kena as saying. “The proposal must be stopped entirely. The IMF must look at some other means of supporting distressed countries that depend heavily on gold to fund their economies instead of selling gold, especially when the price of the commodity is already down,” he added. The IMF’s plan to sell 10 percent of its gold stocks and use the money as debt relief for Highly Indebted Poor Countries (HIPCs) has also been criticised by the World Gold Council (WGC), which blamed it for the fall in gold prices. The price collapse has already caused developing nations to lose over US $150 million in annual export earnings, more than they stand to gain from the IMF’s proposed sale, the WGC said. Sub-Saharan Africa, which includes 33 of the 41 HIPCs, produces about 25 percent of the world’s gold. The metal comprises about 7.8 percent of total exports, earning the region an estimated US $6.8 billion in 1997. The continent’s major gold producers include Burkina Faso, Cote d’Ivoire, Democratic Republic of Congo, Ethiopia, Ghana, Guinea, Mali, Namibia, Sudan, South Africa, Tanzania, Uganda, and Zimbabwe.