Veep: Don’t misinterpret country’s gold-for-oil policy

Vice President Dr Mahamudu Bawumia has stated that some analysts and commentators have being misinterpreting the country’s intended policy of using gold reserves to pay for oil as an attempt by the country to move away from the use of the United States dollar for international transaction.

Speaking at the 2022 AGI Awards in Accra recently, Dr Bawumia noted that to the contrary, Ghana’s gold-for-oil programme would give the country space to accumulate more international reserves as it would save the $3 billion spent on oil imports.

He further stated that the use of gold was specifically for oil imports in the face of declining foreign exchange reserves.

“Unfortunately, some people have misinterpreted this as Ghana being against the use of the US dollar in international transactions,” he stated.

“Far from it. We want to accumulate more US dollar reserves in the future.”

Vice President Bawumia noted that a major source of the Ghana Cedi’s depreciation has been the demand for forex to finance importation of oil products and to address this challenge, government has being negotiating a new policy regime, where sustainable mined gold would be used to buy oil products.

“If we implement the gold-for-oil policy as it is 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,” he said.

This, he noted, was because the exchange rate would no longer directly enter the formula for the determination of fuel or utility prices, since all the domestic sellers of fuel would no longer need foreign exchange to import oil products.

Government had announced that from January, it would exchange gold produced locally for a portion of the petroleum needs of the country. -3news

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