Dr. Mahamudu Bawumia, Vice President of Ghana, has declared that the country would begin enforcing the Gold for Oil Policy next month.
The Vice President of Ghana declared last month that Ghana will begin paying for imported oil products with gold, a move that would have a favorable effect on the country’s US Dollar foreign currency reserve, gasoline costs, and overall cost of living.
As Vice President Bawumia said on his Facebook page on Thursday, the first shipment of oil goods under the strategy will begin next month.
“I am happy to announce that the Government of Ghana has concluded the arrangements for the operationalization of the Gold for Oil policy,” he said.
That’s why we’ll start seeing deliveries of oil goods covered under the scheme next month (January 2023). I’d like to express my appreciation to those who took the lead in making the government’s Gold for Oil Policy a reality: the Energy Minister, the Minister of Lands and Natural Resources, the Governor of the Bank of Ghana, the Chamber of Mines, the Private Minerals and Metals Committee, and the Board of Science and Technology. May God bless Ghana, he said.
The cedi depreciates and the cost of life rises due to increasing costs for fuel, transportation, utilities, etc. as a result of the need for foreign exchange by oil importers due to declining foreign exchange reserves. Government negotiators are working on a new policy framework that will allow us to purchase oil with gold rather than dollars. Dr. Bawumia stated on Facebook that the trade of sustainably mined gold for oil is one of the most significant changes in economic policy in Ghana since independence.
To paraphrase from the report: “If we execute it as envisioned, it would fundamentally transform our balance of payments and greatly lessen the chronic depreciation of our currency, with its related rises in gasoline, power, water, transit, and food prices. Since local fuel merchants no longer require foreign exchange to import oil products, the exchange rate (spot or forward) will no longer factor directly into the calculation for determining fuel or utility pricing.
Trading gold for oil is a fundamental shift in economic policy. For their assistance in formulating this new policy, I’d like to express my gratitude to the Lands and Natural Resources Minister, the Energy Minister, the Finance Minister, the Precious Minerals Marketing Company, and the Governor of the Bank of Ghana.
By the end of Q1 2023, we anticipate this new framework to be completely functional. May God bless Ghana, our home.