Ghana appeals to IMF to halt gold sales

Accra, Ghana - Ghana Wednesday described as "unfortunate" the decision of the International Monetary Fund to sell gold to enable it to provide aid to poor nations, saying it could have a crippling effect on gold producing economies.

The country's mines and energy minister, Fred Ohene Kena, said the fund must look for other alternatives of supporting distressed economies.

The IMF has declared its intention to sell gold and put the revenue into a trust fund and use the interest to fund debt relief and lending programme for poor countries.

Kena said most gold producing economies are already reeling under the pressure of the recent depreciation in gold price and cannot afford to experience another price fall.

He said the intended sale must be stopped as the assurance by IMF Managing Director, Michel Camdessus, that it would make every effort to ensure the sales do not unsettle the markets, cannot be guaranteed.

"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 started lobbying for gold sales in 1996, viewing them as a way to close a funding gap in its programme of concessionary lending for poor countries.

It would sell up to 10 million ounces of gold and use the money as debt relief for Highly Indebted Poor Countries.

Kena did not say how much the fall of world market price on gold would cost Ghana but repeated that the decision is bad and must not be implemented.

Gold is Ghana's main export earner with an annual production of some 2,000 ounces.