The policy to buy oil products with gold instead of US dollar reserves is intended to deal with dwindling foreign currency reserves, coupled with demand for dollars by oil importers, which has weakened the Ghanaian cedi and increased the cost of living.
Vice President Dr. Mahamudu Bawumia said the government would save about US$3 billion annually from the proposed policy of acquiring oil products in exchange for gold.
He explained that the policy that will be implemented in the first quarter of next year can also reduce inflationary pressure on the cedi.
Speaking at the 11th Association of Ghana Industries (AGI) Ghana Industry and Quality Awards in Accra, Bawumia said “So we will save US$ 3 billion from the lack of demand from the Bank of Ghana (BoG) for foreign exchange. This will reduce the pressure on the cedi immediately and, therefore, you will see a lower depreciation of the currency.”
He stated that the economy is dependent on imports, especially for petroleum products, accelerating the depreciation of the cedi and increasing the cost of doing business and the cost of living.
Former Chief Executive Officer (CEO) of the Ghana National Petroleum Corporation (GNPC), Alex Mold added his voice to the policy has raised the issue of the operationalization of gold for oil policy.
He explained that the government is doing the same to existing industry players by bringing finished products into the country.
Earlier, the Executive Director of the Chamber of Petroleum Consumers, Ghana (COPEC), Duncan Amoah, said the price of petroleum products could go down if the oil secured by the government is distributed.
On January 15, 2023, Ghana sent 40,000 metric tons of the first consignment under the policy from the United Arab Emirates after the gold policy for oil was initiated by the government.
Duncan Amoah is optimistic that the price of the commodity can go down if the distribution of the commodity is completed soon.
But Alex Mold said the government’s buying and selling of gold will not bring in extra forex because the Bank of Ghana (BoG) has already acquired the foreign exchange that small-scale and community miners are selling.
In a Facebook post, he said that there is no cheap fuel anywhere and added that “we will not see a 20% drop in fuel because of the gold deal for oil.