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Ghana’s Gold Purchasing To Counteract Devastating Inflation

Ghana's Gold Purchasing
On May 17, 2022, Ghana announced its new plan to counteract continuously increasing inflation rates by bulking up its gold reserves. Ghana’s government decided to begin purchasing gold domestically to maintain economic growth and flow by strengthening the currency’s backbone and slowing inflation rates.

Inflation and Currency Issues

Ghana’s overall inflation rate is at its highest since August 2009 and is likely to get worse before it gets better. The inflation rate has been increasing monthly for a year and peaked at 23.6% in April 2022. Food prices rose 26.6%, with other non-food-related prices inflating 21.3%, up an additional 4% from April 2022.

Ghana’s national currency, the cedi, exacerbates Ghana’s inflation issues. As Ghana is so heavily reliant on international operations, such as trade and imported goods, the country requires an excess of foreign currency in its reserves. During the COVID-19 pandemic, Ghana’s currency exchange rate remained steady, making the cedi stable. However, there has been a growing demand for international services and exchanged goods worldwide. Ghana has not been able to keep pace with the demand or generate enough foreign currency to not deplete most of the country’s reserves. Thus, Ghana’s currency is depreciating rapidly while the inflation rate continues to impact all its citizens. Therefore, Ghana’s government must find solutions before the poverty rate rises with other economic problems.

Ghana’s Gold Purchasing is a Necessity

Ghana is one of the leading countries in gold mining and exportation. It is the seventh-largest gold producer globally and has been nicknamed “Africa’s Gold Coast” for decades. With all the gold that Ghana produces, it is impressive that its reserves have gotten so low. Still, it is also detrimental to the health of the economy. The lack of gold reserves means Ghana’s gold purchasing program is necessary to build the economy back up and give the cedi strength. Any gold-producing country has its economy at its healthiest when gold prices are higher because the value of gold exports is higher.

In 2021, Ghana’s Vice President, Dr. Mahamudu Bawumia, stated, “But gold has become the cornerstone of central banks’ modern reserve management. Central banks have become the third force behind jewelry and technology and investment sectors in the global gold demand in the past decade.” Plans for Ghana’s gold purchasing began in 2021 but started in earnest in 2022 to back the cedi and bring life back to the economy as gold solidified its place in the Ghana economy.

No central bank can fake or split gold as quickly as other flat values or currencies, and its value cannot inflate unless the gold markets and prices do. As Ghana produces an immense amount of gold, buying the gold locally saves the government millions of dollars that they do not have in foreign or local currencies.

What Makes Ghana’s Gold Purchasing So Important?

Ghana’s lackluster currency and high inflation rates could bring devastation to all its citizens, making the lives of those in poverty that much more challenging. Ghana, which has a poverty rate of 11.3%, will likely see this rate worsen if the government cannot halt the inflation rate or stabilize the currency. Ghana’s gold purchasing program must take effect quickly enough to counteract the damages done to families at risk of losing their homes and livelihoods.

Inflation of prices hits poorer households harder and faster than it does the more well-off households and families. Lower-income households in developing countries, such as Ghana, spend almost 50% of their income on food alone. As the prices inflate, households with higher incomes can switch to lower-quality goods that the lower-income families are already purchasing. Lower-income households cannot spend their money on lower-quality goods.

Furthermore, a weakened currency makes exports and incoming goods more expensive, causing the prices to increase and driving those in poverty to spend more than they have. Ghana’s gold purchasing will give the economy a chance to revitalize by stopping rising prices and allowing households in poverty to not spend as much. Without the help of Ghana’s gold purchasing program, the poverty rates could soar again. Thankfully, the sooner Ghana implements the program, the sooner economic flow can continue at a healthy pace without inflation causing mayhem on families’ wallets and income.

– Clara Mulvihill
Photo: Flickr

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Gojira’s Activism for Indigenous Brazilians

Gojira's activismThe Yanomami indigenous reserve in Brazil is roughly the size of Portugal, though fewer than 200 healthcare workers serve the area. The effects of malnutrition and malaria among indigenous Brazilians have taken a severe toll on children. Indigenous populations are also more vulnerable to COVID-19. Epidemiologist Andrey Cardoso told The Guardian that the COVID-19 death rate is higher in indigenous children younger than 5 compared to the same age group in the general population. Deteriorating healthcare is just one of the issues indigenous people in Brazil face. Rampant deforestation and attacks from illegal gold miners have also plagued these groups. These issues have resonated with a heavy metal band, Gojira. Gojira’s activism has spurred people to raise more than $300,000 in support of the indigenous Brazilian rights group, The Articulation of Indigenous Peoples of Brazil.

Illegal Gold Mining

Violent attacks have been a growing problem for indigenous Brazilians. Land conflicts in Brazil hit an all-time high in 2020 with more than 1,500 cases, 656 of which involved indigenous Brazilians. Illegal gold miners have been particularly aggressive toward indigenous groups. In May 2021, unlawful gold miners invaded the Munduruku indigenous reserve, setting multiple houses ablaze.

In another attack on the Yanomami people, illegal miners “opened fire with automatic weapons” during three consecutive days of violent fighting. Illegal mining has also led to severe deforestation in the region with more than 3,000 acres of forestland cleared in the Munduruku reserve in January and February 2021 alone. Additionally, reports indicate that more than 1,700 acres of land have been degraded in the Yanomami reserve from January 2020 till May 2021.

Brazilian Indigenous Healthcare

The effects of the attacks comprise just a portion of the problems that plague indigenous groups in Brazil. A 2019 report requested and funded by UNICEF reveals that, in the Yanomami areas of Polo Base de Auaris and Polo Base de Maturacá, roughly 81% of children younger than 5 were chronically malnourished. Poor access to nutritious foods was highlighted as one of the causes.

Overall, healthcare access in these regions is also poor. Member of the Indigenous District Health Council, Junior Yanomami, told El Pais that healthcare groups had not visited the village of Maimasi for six months at one point. Not only were many residents stricken with malaria, but several children suffered from malnutrition and verminosis — a disease caused by parasitic worms. In total, fewer than 200 healthcare workers cover the 28,000 Yanomami and Ye’kwana people in Brazil, highlighting the lack of health support in the areas.

Gojira Assists

Upon learning more about the problems plaguing indigenous people in Brazil, Gojira partnered with the activism support website, Propeller, to host an auction of heavy metal memorabilia in support of the largest indigenous rights group in Brazil, The Articulation of Indigenous Peoples of Brazil. Gojira’s activism auction came after the band released its single, Amazonia, in support of The Articulation of Indigenous Peoples of Brazil.

The auction, which featured personal memorabilia from heavy metal icons like Metallica, Slayer, Slash and Tool, raised more than $300,000 for the indigenous rights group. In another successful effort by the band, Gojira’s activism also garnered support and awareness for an important cause. “Words are great, music is great, but action is something concrete,” Gojira drummer, Mario Duplantier, told Louder Sound.

Inspiring Activism

Hopefully, Gojira’s activism marks just one way in which indigenous groups in Brazil begin to receive the support and fundraising needed to combat the major issues they face. In addition, Gojira will hopefully serve as an example of how other famous groups can use their platforms to make an impact in struggling communities around the world.

– Brett Grega
Photo: Flickr

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Zambia’s Mining Industry Strikes Gold

Zambia's Mining IndustryThanks to the abundance of mineral deposits in Zambia, investors have continued to flock to the country in spite of the pandemic-fueled economic downturn in many parts of the world. By deeming gold a critical mineral, the government is actively expanding Zambia’s mining industry by mandating that Zambia Consolidated Copper Mines Investment Holdings PLC (ZCCM-IH), a mining consortium, “drive the gold national agenda.”

Productive Mining Partnerships

Zambia’s government is a major investor in ZCCM-IH. Array Metals and ZCCM-IH have formed a partnership through Consolidated Gold Company Zambia (CGCZ). Array Metals determined that the venture will immediately generate local employment for 300 people. Mining is expected to commence sometime in June 2020 and will lead to another increase in employment. The establishment of new and competing mining firms will be beneficial for Zambia by encouraging a rise in gold production, increasing the national GDP and creating new opportunities for local employment.

Potential Profits from Gold Mining

With an approximation of 16,500 pounds of gold (around $400 million in value) within gold ore in Mumbwa, Zambia, continued investments in the Republic of Zambia are indicative of an economically auspicious future for the country. The gold mine is situated in Central Province, Zambia, and had been shut down for years before exploratory studies revealed the previously undiscovered resources within.

Roughly $2.5 million in capital has been devoted to the beginning portion of the project alone, with CGCZ aiming for an initial yield of 3 metric tons of gold (about $150 million in value).

How Zambia is Improving the Local Gold Mining Industry

According to CGCZ’s CEO Faisal Keer, “CGCZ is partnering with various small-scale gold miners in the country by providing mining technical expertise, and providing access to earthmoving machinery and gold processing lines to kick-start and boost their gold production.”

Since the majority of local miners mine through the process of gold panning, one focus of another partnership between ZCCM-IH and Karma Mining Services is to improve Zambia’s local gold mining efficiency. While CGCZ is only operating in the Mumbwa and Rufunsa districts of Zambia, there are more than 60 sites for gold mining. Local miners have also partnered with other foreign investors.

Although there is no official documentation, some have profited off illegally mining and smuggling gold out of Zambia. The government’s newfound focus on Zambia’s local gold mining has the perk of bringing lawfulness to a previously unformalized industry. In that spirit, the “government has given artisanal miners gold panning certificates to legalize their alluvial or riverbed gold mining activities.”

By supplying licensed miners with machinery, equipment, and knowledge about the industry through ZCCM-IH and CGCZ, Zambians are encouraged to participate in Zambia’s local gold mining. The formalizing of the gold mining industry will benefit more than Zambia, for it will enable licensed miners and locals to “reap the benefits of the assets under Zambian soil.”

– Carlos Williams
Photo: Flickr