Gold for oil: Ghana to save US$4.8 billion annually, says Bawumia
The policy is to allow the government to pay for imported oil products with gold, in a direct barter with gold purchased by the central bank
Vice-President Mahamudu Bawumia has said Ghana will save about US$4.8 billion annually through the gold for oil policy.
The policy is to allow the government to pay for imported oil products with gold, in a direct barter with gold purchased by the central bank.
The move is an intervention to help stabilise prices of fuel products, as well as reduce pressure on Ghana’s foreign exchange, as the direct gold barter will be the mode of paying for imported oil instead of depleting the foreign exchange reserve.
Experts including the former boss of the National Petroleum Authority (NPA) Alex Mould have described the policy as needless.
However, speaking at the commissioning of a new head office for the Bulk Oil Storage and Transportation Company in Accra on Wednesday (15 March), Bawumia said the government will soon increase import of oil under the policy to 100%.
“We are currently importing about 50 to 60% of our oil import under this policy,” Bawumia said. “The goal is to move to 100% and that will be done this year.”
“But the savings in foreign exchange when we do this will be an annual savings of US$4.8 billion every year when we get this done.
“And that means oil importing companies will not go to the Bank of Ghana to look for US$4.8 million to buy oil, we will buy that gold with our cedis, convert it into oil payment and that demand will no longer be there,” Bawumia added.
Listen to Dr Mahamudu Bawumia in the attached audio clip below:
Reporting by Fred Dzakpata in Accra
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