The Vice President of Ghana, Dr. Mahamudu Bawumia says some analysts and commentators have misinterpreted Ghana’s stated policy of using gold reserves to pay for oil in an attempt by the country to move away from the US dollar for international transactions.
Speaking at the 2022 AGI Awards in Accra, Dr. Bawumia noted that, to the contrary, Ghana's gold for oil program will give Ghana the space to accumulate more international reserves as the country will save the $3 billion it spends on oil imports.
He further stated that the use of gold was specifically for oil imports in the face of declining foreign exchange reserves.
“Unfortunately some people have misinterpreted this as Ghana being against the use of the US dollar in international transactions. Far from it. We want to accumulate more US dollar reserves in the future,” the Vice President said.
Vice President Bawumia noted that a major source of cedi depreciation has been the demand for forex to finance our import of oil products and to address this challenge, government is negotiating a new policy regime where sustainable mined gold will be used to buy oil products.
Dr. Bawumia stated; "If we implement the goild for oil policy as it as envisioned, it will fundamentally change our balance of payments and significantly reduce the persistent depreciation of our currency with its associated increases in fuel, electricity, water, transport and food prices."
This, he noted, is because the exchange rate (spot or forward) will no longer directly enter the formula for determination of fuel or utility prices since all the domestic sellers of fuel will no longer need foreign exchange to import oil products.
Source: Peacefmonline.com/Ghana
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Yes, you can accumulate all the dollars in the market but if you still fail to get your priorities right we will go back to square one.Ghana's problem is not about resources, it's about leadership. God with his mercies have given Ghana all it needs for the people to live meaningful lives. Currently it's like the gold, bauxite, manganese, cocoa, timber, crude oil are becoming a curse rather than a blessing. Burkina Faso doesn't produce crude oil, that country is landlocked, no sea passes through Burkina Faso, their fuel tanker vehicles travel by road all the way from Quagadougou to tema to lift fuel and travel all the way back to their country and yet still fuel sells much cheaper in Burkina Faso compared to Ghana currently. Prices are much more stable in Burkina Faso compared to Ghana, they don't have a quarter of the natural resources at Ghana's disposal and yet they manage the little they have to make life bearable for their citizens. I keep asking how they were able to escape Covid 19 and the Russia vrs Ukraine war. How come Ghana is importing tomatoes from Burkina Faso when we have more favorable rainfall patterns and fertile lands than them, how? Ghana definitely needs a leader. If we can get a leader together with his appointees who are all willing to put Ghana first above their personal interest, this country will bounce back strongly with or without Covid 19 or Russia/Ukraine which we are being told are responsible for our current hopeless predicament. Now those working are not laughing, as for the unemployed their daily survival is a miracle. God save us.
I salute the wisdom of Okokroko Kwasi Oppong as he's the first person to really open my eye on using gold to pay imports. Also I salute the Vice President for thinking through this initiative