The missing half of risk management: Why Ghana’s commodity businesses must embrace hedging

Ghanaian businesses have become fluent in the language of currency risk, tracking the cedi daily as FX hedging becomes standard practice for large firms. Yet, when commodity price hedging is raised in the same boardrooms, the conversation stalls.

Gold producers, oil marketers and manufacturers who would never leave a dollar payable unhedged will carry full exposure to gold, crude or gasoil prices unprotected. In a year of extraordinary swings in both, the cost of leaving that risk unmanaged has never been higher.

A culture gap, not a capability gap

The tools to hedge commodity risk are neither new nor exotic. Forwards, collars, swaps and options on gold, oil and other reference commodities are available through the same banking relationships corporates already use for FX.

What is missing is not access, but habit: price movements have long been treated as an unavoidable cost of doing business, a mindset that suited contained ranges but makes little sense now.

Gold moved from roughly $2,600 an ounce in early 2025 to an intraday record above $5,500 in January 2026, before retreating and rallying again above $4,500 by August. Such moves are not market noise; they can materially affect profitability, cash flow and investment decisions.

Why commodity risk and FX risk are the same conversation

In Ghana, the two are rarely separate. Nearly every commodity transaction of scale ultimately settles in dollars and converts through the cedi, so a business that hedges FX but ignores the underlying commodity price has only solved half its problem: it protects the rate at which it converts a number, not the number itself.

A fuel importer’s landed cost depends on both the dollar price and the settlement rate, so hedging only one leg leaves the other exposed; the same applies in reverse for gold exporters, where a falling price and a weak currency compound each other.

Businesses most exposed share thin margins, dollar-denominated pricing and working capital cycles with little room to absorb a sudden move: an oil marketer financing a cargo, or a mining supplier pricing contracts several months ahead, can see an adverse swing become a real cash shortfall or result in an unprofitable contract.

Local corporates more often carry this unhedged exposure, less by choice than habit, while multinationals guided by global treasury policies stay ahead and gain a real advantage.

What hedging actually offers

Hedging is not about predicting where prices are headed; its value lies in removing the need to forecast at all.

A well-structured hedge fixes or bounds an outcome, so profitability depends on how well a business runs its operations, not on the market. A forward locks in a price at no upfront cost, an option protects against adverse moves for a premium while preserving upside, and a zero-cost collar combines both at no cash outlay, which matters for a business managing a stretched cash cycle.

Structured well, hedging converts an uncertain, potentially large loss into a small, known, budgeted one.

A case in point: Client ABC’s gold collar

The abstract case for hedging becomes more persuasive when set against what has happened in the gold market this year.

Gold began 2026 on a tear, touching an intraday record above $5,600 an ounce in late January, before a sharp correction dragged it down to a seven-month low near $4,000 by June; its worst monthly decline in close to two decades.

By late August, the price had recovered again to trade around $4,600. Three moves, each large enough on its own to reshape a producer’s annual numbers, all inside a single trading year.

The writer

Client ABC, a Ghanaian gold producer we work with, entered the year with a zero-cost collar structured around that exact range: a floor of $4,000 an ounce and a cap of $5,600 an ounce, set to cover a representative 6,000 ounces of planned sales for the year.

The structure cost nothing upfront, the premium on the protective floor was funded entirely by giving up participation above the cap, and it guaranteed Client ABC one thing with certainty at the start of January, before any of the year’s volatility had unfolded.

Translate the year’s actual price action into that structure and the value becomes concrete.

When gold fell to its June trough near $4,000, Client ABC’s floor meant its realised price on that hedged tranche could not fall below $4,000 an ounce, regardless of how much further the market slipped intraday.

A comparable producer with no hedge in place, forced by its own delivery or financing schedule to sell into that same trough, had no such backstop; it simply received whatever the market offered on the day.

And had Client ABC instead been unhedged and needed to sell at two different points in the year—once near the January peak and once near the June trough—the gap between those two outcomes alone would have been roughly $1,600 an ounce, or about $9.6 million across the 6,000-ounce volume.

That is not a modelling exercise. It is the difference between two real prices that gold traded at, eight weeks apart, entirely outside the producer’s control.

The cap side of the structure tells the other half of the story, and it is worth being honest about it.

Because Client ABC gave up upside above $5,600 an ounce to fund its floor at no cost, any volume priced at the January peak would have been settled at the cap rather than at the market high; roughly $5,600 an ounce rather than a fraction above it.

That is the premium a producer pays for certainty when a zero-cost structure is used instead of an outright forward: the cost is not cash; it is the upside surrendered at the very top of the range.

For a business managing cash flow rather than speculating on price direction, that trade-off is, in most cases, the point rather than the drawback.

With gold now trading around $4,600, comfortably inside the collar’s band, Client ABC is simply receiving the prevailing market price on new volumes; the floor and cap only bind at the extremes, and the business participates in the market fully in between.

That is the quieter, less dramatic benefit of the structure, and arguably the more important one: for most of the year, the hedge does nothing at all, because it does not need to. It sits in the background until the market moves hard enough in either direction to matter, and then it does exactly what it was built to do.

Beyond gold and oil: The broader commodity exposure

The same logic extends well beyond gold and oil. Manufacturers importing aluminium, steel or plastics carry exposure to industrial metal prices, and agro-processors face swings in cocoa, wheat or vegetable oil benchmarks.

Even businesses with no direct import or export activity carry indirect exposure through energy, freight or packaging costs tied to global commodity cycles.

Leaving a meaningful commodity exposure unmanaged is itself a decision, one that hands control to the market.

Building the habit

Changing this culture starts with a simple exercise: identifying which commodities genuinely drive the business, quantifying what a realistic adverse move would cost in cedi terms, and asking whether that number could be absorbed without disruption.

Stanbic Bank’s Global Markets desks, already serving the FX needs of local and multinational corporates, are well placed to support that shift, not by selling complexity, but by helping businesses translate a real exposure into a structure that fits their cash flow and risk appetite.

The businesses that build this discipline now will be better positioned when the next major swing arrives.

The writer is Sales Manager, Global Markets, Corporate and Investment Banking, Stanbic Bank Ghana.

BY OFORIWAA ATIPOE

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