The Co-chair of the Ghana Extractive Industry Transparency Initiative (GHEITI) Dr. Steve Manteaw, has highlighted several concerns regarding the $3.1 billion spent on the gold-for-oil policy.

Dr. Manteaw emphasized that transparency issues surrounding the policy have made it difficult for stakeholders and the public to fully trust the program. Dr. Manteaw began by addressing the fundamental issue of transparency.

“The whole gold-for-oil program has been shrouded in secrecy, in ways that [have] not built public trust.”
Dr. Steve Manteaw the Co-chair of the Ghana Extractive Industry Transparency Initiative (GHEITI)

Dr. Manteaw pointed out that from the onset, there were challenges with how the policy was communicated and documented. The Ghana Extractive Industries Transparency Initiative (GHEITI) had previously called on the government to disclose the policy document underpinning the program, but this request went unfulfilled.

“You couldn’t…implement a program that has not been carefully thought through and documented.”
Dr. Steve Manteaw the Co-chair of the Ghana Extractive Industry Transparency Initiative (GHEITI)

Inadequate Consultation Weakens Program

Furthermore, Dr. Manteaw pointed out that the lack of consultation surrounding the gold-for-oil policy deprived the program of vital expertise and support.

“There hadn’t been adequate consultations around the program which deprives the program of expertise input and also civil society support.’’
Dr. Steve Manteaw the Co-chair of the Ghana Extractive Industry Transparency Initiative (GHEITI)

Dr. Manteaw argued that, has hindered the program’s effectiveness and led to critical gaps in its implementation.

Financing Concerns and Extra-Budgetary Issues

One of the significant concerns Dr. Manteaw raised was related to the financing of gold purchases. Initially, there were expectations that the national budget would account for the gold purchases required by the policy.

However, as he explained, “We went into the budget to find the provision for the local purchases. We found none.” Instead, the Bank of Ghana was tasked with financing the purchases, which occurred without the approval of Parliament.

Dr. Manteaw described this as “extra-budgetary financing by the central bank,” warning that it is not a sound practice of economic governance. As a result, the World Bank advised the Bank of Ghana to withdraw from the program, further exposing the lack of foresight in its planning.

Opacity in Gold Sales and Oil Procurement Processes

Additionally, Dr. Manteaw drew attention to the opaque processes surrounding gold sales and the procurement of oil products. He explained that while intermediaries are necessary for selling gold on international markets, there has been little clarity regarding how the government selects those intermediaries. “We were not too clear how we were procuring those services,” he noted, stressing the need for transparency in this area. On the other side of the transaction, the procurement of finished oil products also raised questions.

“It was not too clear how we were even selecting the suppliers.”
Dr. Steve Manteaw the Co-chair of the Ghana Extractive Industry Transparency Initiative (GHEITI)

Dr. Manteaw remarked, adding that the lack of transparency on both ends of the transaction chain opens the door to “rent-seeking and corrupt activities.”

In (GHEITI) report on the mining sector, which is publicly available on the Ministry of Finance’s website, these concerns are elaborated upon. Dr. Manteaw emphasized that the report challenges the government to fully disclose all details related to the gold-for-oil program, including the criteria used to select buyers and suppliers. He emphasized ‘We still do not have those disclosures.”

Potential Benefits of the Gold-for-Oil Policy

Despite these issues, Dr. Manteaw acknowledged that the gold-for-oil policy might have potential benefits if properly managed. Dr. Manteaw suggested that if the program were thoughtfully designed, it could help stabilize Ghana’s foreign exchange reserves. He asserted that ‘the gold-for-oil program, perhaps, maybe a good idea.’’

Dr. Manteaw However, due to the lack of transparency, he and others in his field remain unable to verify Vice President Bawumia’s claims about the program’s success. One of the potential benefits of the gold-for-oil policy, according to Dr. Manteaw, could be its contribution to increasing Ghana’s gold reserves. Dr. Manteaw suggested that the government could consider taking mineral royalties from large-scale gold producers in gold rather than in cash.

“If you’re a country that wants to increase your stockpile of gold, then, of course, you want to shift from taking your royalty in cash to in-kind.”
Dr. Steve Manteaw the Co-chair of the Ghana Extractive Industry Transparency Initiative (GHEITI)

Currently, the government continues to receive royalties in cash, which he believes is a missed opportunity. Dr. Manteaw called on Vice President Bawumia, now the NPP’s presidential candidate, to provide further details to address these outstanding concerns.

“If the vice president can provide further details on these issues, it will help to build public trust.”
Dr. Steve Manteaw the Co-chair of the Ghana Extractive Industry Transparency Initiative (GHEITI)

This transparency, he believes, is crucial for gaining the public’s confidence in the program and confirming the assertions made by the government about its success. Dr. Manteaw acknowledged that the gold-for-oil policy could have merit, but he stressed that the lack of transparency and consultation has severely undermined its potential.

The opacity surrounding the financing, procurement, and management of the policy has led to widespread concerns, which Dr. Manteaw believes must be addressed through comprehensive disclosures from the government. Only with greater transparency and careful planning, Dr. Manteaw argued that the program fulfills its intended goals and benefits the Ghanaian economy.