The Vice President of Ghana, Mahamudu Bawumia said on Thursday that the Ghanaian government is working on a new policy to trade its gold reserves for petroleum products rather than US Dollars.
“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,” Bawumia posted on Facebook.
The move to buy petroleum products with Ghana’s mined gold will be one of the most strategic changes in the country’s economic policy since its independence from British colonial rule.
The vice president added he hoped the new system would be fully operational by the end of the first quarter of 2023.
Ghana produces crude oil, but since its sole refinery shut down due to a 2017 explosion, it has been reliant on imports for refined oil products.
Ofori-Atta warned Ghana’s parliament during the presentation of the 2023 budget that the country faced a high risk of debt distress and that the depreciation of the cedi was negatively impacting Ghana’s capacity to manage its public debt.