The much anticipated first consignment of government of Ghana’s gold-for-oil policy has finally arrived in the country after several days of expectancy.
The petroleum products have been delivered at the Tema Port and discharged into Bulk Oil Storage and Transportation Company (BOST) vessels by oil products tanker, SCF YENISEI.
The delivered petroleum products are expected to be sold by BOST, a state-owned company to Bulk Oil Distributing Companies (BDCs) across the country.
The 41,000 metric tonnes of the petroleum products delivered by SCF YENISEI was worth US$40 million and was brokered by the Economic Management Team championed by Dr Mahamudu Bawumia, Vice President of the Republic of Ghana.
According to Dr. Bawumia, the move was meant to tackle dwindling foreign currency reserves coupled with demand for dollars by oil importers, which was weakening the local cedi and increasing living costs.
“It will fundamentally change our balance of payments and significantly reduce the persistent depreciation of our currency.”
Dr. Bawumia
Using gold would inhibit the exchange rate from directly having an impact on fuel and utility prices as domestic sellers would no longer need foreign exchange to import oil products, the Vice President said.
BOST would pay proceeds from the transaction with the BDCs into an escrow account at the Bank of Ghana for the procurement of gold for the process.
The Ministers for Energy, Lands and Natural Resources, Governor of the Bank of Ghana, the Chamber of Mines, the Precious Mineral Marketing Company (PMMC) and BOST were among other members of the team who worked for the operationalization of the move.
Background of the Gold-for-Oil-Policy
The first consignment of the Gold for Oil Policy by the government is an initiative by the government to curtail the increasing depreciation of the Ghanaian cedi against other major currencies.
In November 2022, the government announced plans to buy oil products with gold rather than US dollars.
Hon. Andrews Kofi Egyapa Mercer, the Deputy Energy Minister on behalf the government signed the deal in Dubai and later revealed that other oil companies have expressed interest in the initiative.
This implies, Ghana should be expectant to be forming more of such partnerships and engaged in such barter trades in the near future.
“Whatever government is doing is intended to complement what it is that the private sector who are operators within the space are providing just so that we can take some pressure off the dollar, okay, and make it available to other people who ordinarily will not be getting…”
Andrew Mercer
George Mireku Duker, the Deputy Minister of Lands and Natural Resources has urged all Ghanaians to join hands to accept it by indicating that the gold-for-oil deal would help resuscitate the economy.
“Yes, there are concerns by some of the stakeholders that there have not been extensive deliberations on the deal, but we are still engaging all who matter. There are gaps, and this is normal with every new concept. We will reconcile and get everyone on board.”
George Duker
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