Osei Kyei Mensah Bonsu, Majority Leader in Ghana’s Parliament has hyped government’s Gold-for-Oil Policy, saying, it will help the country kill many birds using one stone and also promises to make Ghana wealthier.
The Majority Leader, who also doubles as the Minister for Parliamentary Affairs, described the policy as revolutionary, saying it will stop the smuggling of gold out of the country and also tackle the problem of mining companies selling gold to private entities without government’s approval.
“The Gold-for-Oil policy is a very good policy; it will help us kill many birds with one stone.”
Kyei Mensah Bonsu
According to the Minister, Ghana has the Mining and Minerals Act, which has a provision called ‘the pre-emption provision’. The provision specifies that all the gold that is mined in Ghana should first be sold to the government before any third party. Should the government decide not to buy it, it can then be sold to private entities.
The challenge the country is now confronted with, Mr. Osei Mensah Bonsu said is that, the mining companies in Ghana, most especially the small-scale mining companies have refused to comply with the provisions of the Act.
“They (the small-scale mining companies) sell the Gold to the Chinese, Indians and the like but the government gets nothing from it despite the fact that they are destroying our lands.
“Currently on our books, gold excavated in Ghana is worth almost 3 million ounces but if you check the amount of gold that has actually been exported out of Ghana, its between 7 and 8 million ounces.”
Kyei Mensah Bonsu
Mr. Mensah Bonsu believes that the Gold-for-Oil Policy will coerce the mining companies to sell gold directly to the government.
“It (the Gold-for-oil policy) will force all of them (the mining companies) to declare. So this will help us in a mightier way so that we get the right wealth from our resources.”
Kyei Mensah Bonsu
Moreover, the Gold-for-Oil Policy will also help deal with the depreciation of the local currency by completely eroding foreign exchange through the importation of oil products into the country, Mr. Mensah Bonsu noted.
Gold-for-Oil also to enhance Ghana’s BoP and reduce depreciation of the Cedi
Dr. Mahamudu Bawumia, Vice President of Ghana, during the introduction of the policy in November 2022, said the gold-for-oil deal would address Ghana’s dwindling foreign reserves as well as reduce demand for US dollars by importers of oil.
“It will fundamentally change our balance of payments and significantly reduce the persistent depreciation of our currency.”
Dr. Bawumia
The government also believes engaging in this deal will bring stability to the exchange rate market and prevent sole dependence on foreign exchange for importation of products by domestic oil operators.
Ghana received its first consignment from the gold-for-oil deal in January, 2023.
The arrival of the oil in exchange for gold has since been beneficial to the Ghanaian populace, most especially, in contributing to the reduction in prices of oil at the pump.
Edwin Alfred Provencal, BOST Managing Director on Monday, February 13th, 2023 says to expect more cargoes of oil from this weekend.
Meanwhile, the Centre for Democracy and Socio-economic Development (CDS) Africa, today, February 15th, 2023, has tasked government to collaborate with the Bank of Ghana and provide measures to ensure that gold purchased under the Gold-for-Oil policy are from legitimate sources within the confines of the country.
CDS recognized and appreciated the efforts made by the government to stabilize the economy, however, asked that government exercises due diligence in ensuring the successful implementation of the policy.
