- The government is contemplating the adoption of a new policy by which gold instead of U.S. dollar reserves may be used to buy oil products.
Vice-President of Ghana, Mahamudu Bawumia revealed on social media that his government is examining the possibility of introducing a major structural change to its oil purchase policy by adopting the barter of gold for oil. The government is contemplating the adoption of a new policy by which gold instead of U.S. dollar reserves may be used to buy oil products.
Ghana’s economy has been facing a severe economic crisis- falling foreign currency reserves led by the growing demand of dollars for oil imports. The local currency “cedi” also continued to lose value against the US dollar amidst rising living costs. The “gold for oil” scheme is expected to address these problems.
The new policy proposed to come into effect in the first quarter of 2023, is expected to bring a fundamental change to the country’s balance of payments and also arrest the depreciation of the Cedi. Domestic importers will no longer need foreign exchange to import oil products.
Falling foreign exchange reserves have been one among many challenges faced by the Ghana economy. According to Government sources, the country’s Gross International Reserves at $6.6 billion in September end 2022, was equal to less than three months of import cover. During the same period, the previous year, it was around $9.7 billion.
Also read;
https://trendsnafrica.com/ghana-announces-a-slew-of-measures-to-revive-economy/
Finance Minister Ken Ofori-Atta had earlier announced a series of measures to cut spending and boost revenues to arrest the spiraling debt crisis. In his 2023 budget presentation to parliament, the Minister warned that with the sharp depreciation of Cedi, the country was at high risk of debt distress. Government negotiations are on seeking a relief package with the International Monetary Fund.
