The Bank of Ghana (BoG) has confirmed that the government’s Gold for Oil policy is advancing according to schedule.
Launched to tackle the depletion of Ghana’s foreign currency reserves and the high demand for dollars by oil importers—which has been negatively impacting the Cedi and increasing living costs—the initiative aims to stabilize the currency and manage inflation.
During a session with the Public Accounts Committee of Parliament on Monday, August 12, Dr. Maxwell Opoku-Afari, the First Deputy Governor of the Bank of Ghana, provided a detailed update on the policy’s progress.
“The gold for oil programme is on track and the reason why the risk for the separate account is mitigated somehow is that the central bank’s participation in terms of financial contribution to the gold for oil is capped and nothing more is being added to that.
“So it is the receivables that are coming from within that cap amount that has been used to continue to finance the gold for oil programme,” he stated.
The Gold for Oil policy, as explained by the government, will the government to pay for imported oil products with gold, in a direct barter with gold purchased by the central bank.
According to the government’s G40 Programme Framework dated February 3, 2023, which explains the policy, payment for the oil supply is done in two channels; barter trade or via forex obtained from selling gold to a broker.
Under the barter channel, suppliers willing to take gold in direct exchange for petroleum products will be provided with the equivalent volume of gold by the Bank of Ghana (BoG).
Under the Broker Channel, the BoG executes a gold supply agreement under which it sells gold to a gold broker, which provides forex cover to pay for petroleum products.
