Vice President Dr Mahamudu Bawumia has announced the negotiation of a landmark new policy which would see the government of Ghana purchase imported oil products with gold rather than foreign exchange.
Dr Bawumia announced the policy shift, which is expected to take effect by the end of the first quarter of 2023, as a move to combat the rampant depreciation of the cedi.
According to him, using Ghana’s mined gold to purchase imported oil rather our dollar reserves will help stabilise the rampant cedi depreciation and its attendant increase in fuel, electricity, water and transport prices.
Bawumia wrote in a post on Facebook: “The demand for foreign exchange by oil importers in the face of dwindling foreign exchange reserves results in the depreciation of the cedi and increases in the cost of living with higher prices for fuel, transportation, utilities, etc. To address this challenge, Government is negotiating a new policy regime where our gold (rather than our US dollar reserves) will be used to buy oil products. The barter of sustainably mined gold for oil is one of the most important economic policy changes in Ghana since independence,”
The Vice President continued: “If we implement it as envisioned, it will fundamentally change our balance of payments and significantly reduce the persistent depreciation of our currency with its associated increases in fuel, electricity, water, transport, and food prices. This is because the exchange rate (spot or forward) will no longer directly enter the formula for the determination of fuel or utility prices since all the domestic sellers of fuel will no longer need foreign exchange to import oil products.
“The barter of gold for oil represents a major structural change. My thanks to the Ministers for Lands and Natural Resources, Energy, and Finance, Precious Minerals Marketing Company, and the Governor of the Bank of Ghana for their supportive work on this new policy.
“We expect this new framework to be fully operational by the end of the first quarter of 2023. God bless our homeland Ghana.”
Source: Peacefmonline.com/Ghana
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If only it wont bring fatal repercussions on our water bodies and others. if only it will be carried out in a decent way without corruption , that will be not bad an idea. Because after all resources given by God can also be depended on to reduce our problems. Dubai and the Arab countries also depend on their resources to developed their country. the only thing is,it should be done well without fatal repercussions on our citizenry and ensure that the resources used are replaceable leaving some for the future generations. Greediness and selfishness must be rule out. not bad .give it a try. But our finance minister Hon Ofori Atta must be reshuffled to another ministry anyway.
Our gold deposits are not inexaustible. We should therefore make use of it to establish alternative source of income for the country rather than use it to buy consumables like fuel.
Which kind leaders be this kraaa. Their silence is better. Is this the economic whatever. what new does this bring. Already you sell gold to get forex to strengthen the cedi and you get forex to buy oil weakens the cedi. don't you know the effect cancels out. bye bye.
@Ceejay What an excellent comment. These are the kinds of forward looking constructive suggestions we need as a country. Thumps up Ceejay.
HMMMM MR VP IF THIS COULD HELP THEN AM ALL FOR IT. WE WILL BE WAITING TO SEE IF IT WORKS. AM CAUTIOUSLY OPTIMISTIC BECAUSE OF OUR ANTECEDENT OF MISMANAGEMENT. WHAT BEATS MY MIND THOUGH IS WHY AS A COUNTRY WE HAVE NOT BEEN ABLE TO ESTABLISH OUR OWN GOLD REFINERY FACILITY TO GET MORE FROM OUR GOLD MINING AND CREATE MORE JOBS AS WELL. SAME AS OUR COCOA AND OTHER RESOURCES. WE SHOULD DEPART FROM SELLING RAW PRODUCTS AND REFINE OUR RESOURCES . ALSO WE SHOULD NOT ANNOUNCE ALL OUR PLANS BEFORE WE BEGIN. IF THIS COULD HELP KUDOS . BUT ALSO CAN'T WE RAMP UP OUR EFFORTS TO HAVE PETROL CHEMICAL HUB TO PROCESS OUR CRUDE INSTEAD OF BUYING REFINED PETROLEUM PRODUCTS.