Dr. Emmanuel Steve Asare Manteaw, a policy analyst and a communication strategist, has noted that the popular Gold-for-Oil program is under serious threats as the Precious Mineral Marketing Company (PMMC) struggles to meet its payment obligations of the precious metal.

According to Dr Manteaw who is also the former board member of the Ghana Extractive Industries Transparency Initiative (GHEITI), the situation could have implications for the country’s gold sector, with the illegal gold trade potentially impacting the market.

“The recent news that the PMMC is unable to pay for gold purchases threatens to undermine the policy’s effectiveness. Small-scale miners who were looking to sell their gold to the PMMC may now face difficulties, leading to frustration and potentially, the risk of smuggling [is high].”
Dr. Emmanuel Steve Asare Manteaw

Dr Manteaw indicated that the challenges facing the PMMC also raise questions about the policy’s implementation and management. “The government will need to address these issues if it is to successfully implement the gold for oil policy and achieve its objectives”.

“The effective functioning of the PMMC is crucial to the policy’s success, and the current difficulties suggest that more needs to be done to ensure that the PMMC is equipped to handle the demands of the gold for oil scheme.”
Dr. Emmanuel Steve Asare Manteaw

Dr Manteaw, moreover, opined that the difficulties facing the PMMC may have wider implications for the country’s gold sector. He added that the government has been keen to promote the sector and has taken steps to support small-scale mining.

However, Dr Manteaw noted if small-scale miners are unable to sell their gold through legal channels, the sector may suffer, with potential knock-on effects for the wider economy. He iterated saying, the news that the PMMC is unable to pay for gold purchases under the gold for oil policy is a cause for concern. “The challenges facing the PMMC may lead to frustration and potentially illegal activity, and could undermine the government’s efforts to promote the gold sector and achieve economic stability”.

Advice to the Government

Dr. Manteaw who also has extensive experience in Extractive Industries Transparency Initiative (EITI) Implementation and a sound appreciation of the legislative and regulatory regimes in the extractive sector in West Africa, advised the government to take steps to address these issues and ensure that the gold for oil policy is implemented effectively and responsibly.

The policy, which aims to help stabilize fuel prices and reduce pressure on Ghana’s foreign exchange by allowing the government to pay for imported petroleum products with gold in direct barter arrangements, is designed to guard against depleting the country’s foreign exchange reserves.

However, the current difficulties facing the PMMC risk frustrating small-scale miners, with potential consequences for the country’s gold sector.

The gold for oil policy has been a point of controversy, with some experts, including the former chief executive of the National Petroleum Authority (NPA), Alex Mould, criticizing the scheme as unnecessary. Nonetheless, the government has pushed ahead with the policy, highlighting its potential benefits for the country’s economic stability.

The Vice President Dr Mahamudu Bawumia, who announced the program, stated at the 2022 Association of Ghana Industries (AGI) Awards in Accra, that the programme will give Ghana the space to accumulate more international reserves as the country will save the $3 billion it spends on oil imports.

Recently, Ghana received its second consignment of Petroleum products under the Gold-for-Oil Programme. Ghana received 40,000MT of diesel and 35,000MT of petrol at a cost of 40 million Dollars.