Gold for oil policy may not be sustainable, says Jantuah

The chief executive of African Energy Consortium Limited, Kwame Jantuah, has cast doubt over the sustainability of the government’s gold for oil policy.

The gold for oil policy is expected to change Ghana’s balance of payments position fundamentally and significantly reduce the persistent depreciation of the cedi.

“The government doesn’t like consulting with others, unfortunately. If they were to consult, better ideas will come out because we’re building the nation together. By the way, this gold for oil will not be sustainable,” Jantuah said on Asaase 99.5 Accra‘s news analysis show, The Forum, on Saturday (4 February).

“One of the pillars of this particular transaction is so we don’t fritter away our dollars, but it has to be done structurally. The company handling this transaction, are they Ghanaians? If they are, what criteria was used to choose them?

“When you look through the process, we are really not told how certain things were achieved. They said it was a barter but it is not a barter. That means you’re taking us for granted to some degree; you’re not being open with us,” Jantuah added.

Demand for forex

In November 2022, the government announced plans to use gold to buy imported oil products.

In an earlier Facebook post, the vice-president said, “The demand for foreign exchange by oil importers in the face of dwindling foreign exchange reserves results in the depreciation of the cedi and increases in the cost of living with higher prices for fuel, transportation, utilities, etc.”

“To address this challenge, the government is negotiating a new policy regime where our gold (rather than our US dollar reserves) will be used to buy oil products. The barter of sustainably mined gold for oil is one of the most important economic policy changes in Ghana since independence,” Mahamudu Bawumia added.

Reporting by Fred Dzakpata in Accra

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