Gold-for-Oil policy contributes 30% of national crude consumption - Lands Minister

Minister for Lands and Natural Resources, Samuel Abu Jinapor has lauded President Nana Addo Dankwa Akufo-Addo, and the Vice President, Dr. Mahamudu Bawumia, for introducing the 'Gold4Oil' Policy, which helped stabilised the local currency and reduced the cost of fuel at the pump.

He said the innovative measures adopted by Government to purchase crude oil without Dollars, became the game changer of the cedi depreciation, and has been a major contributor to the national economy.

It will be recalled that following a constant depreciation of the Ghana Cedi in the last quarter of 2022, Government introduced the 'Gold4Oil' Programme to, among others, purchase oil with gold produced in the country, and ease the pressure on the Ghana Cedi.

The policy required large scale mining companies to sell twenty percent (20%) of their refined gold to the Bank of Ghana, while small scale mining companies were required to sell all their gold to the Bank of Ghana. The Bank of Ghana would, then, use the gold purchased locally to buy crude oil.

Almost one year after the implementation of the Policy, it has emerged that over eight hundred thousand metric tonnes (800,000MT) of Gasoline and Gasoil, representing almost thirty percent (30%) of Ghana’s total crude oil consumption, was purchased through the innovative Gold4Oil Policy.

Presenting the 2024 Budget to Parliament last week, the Finance Minister said, this Policy helped stabilised the Ghana Cedi, by bringing it down from GH¢17 to a dollar in November, 2022 to GH¢12 to a dollar in November, 2023.

He said it also contributed to a reduction in petrol prices, from GHS23 per litre to GH¢12 per litre. The Minister said Government intends to scale up the programme to cover fifty percent (50%) of national consumption.

Contributing to the debate on the Budget Statement in Parliament on Thursday, 23rd November, 2023, the Minister Lands and Natural Resources said this singular innovative policy shows the leadership skills of the President and the Vice President, which is defined the by choices they make in times of adversity.

“In times of crisis, what is required is leadership as it relates to choices, and the President and the Vice President made bold choices that have impacted our economy,” the Minister said.

According to the Minister, until the 'Gold4Oil' programme was introduced, the Bank of Ghana’s reserves were insignificant, but the implementation of the programme, alongside the Domestic Gold Purchase policy, has shored up the Bank’s reserves.

Mr. Jinapor said Government, through the Ministry of Lands and Natural Resources is working to scale up gold production to support the programme.

Speaking on the mining sector’s contribution to the economy, the Minister said the sector contributes almost nine percent (9%) of Gross Domestic Product (GDP), with gold, alone, contributing some US$4.67 billion in exports as at August, 2023, representing forty-three point four percent (43.4%) of total exports this year.

He said Government is working on new mines, including large scale mining companies in the northern part of the country, and the expansion of existing ones, to boost production.

He added that Government is working with the mining companies to contribute to development of mining areas, including the construction of an airport at Bolgatanga.

Abu Jinapor, also, touted the mining lease granted for the exploitation of lithium, which provides for value addition, increased royalties and local participation, saying it is one of the best in the world.

He said Government is also investing in the exploration of other green minerals like graphite, manganese and bauxite to support the green energy transition. The Minister said these and several other measures being implemented by Government will contribute to achieving the One Trillion economy targeted by Government.

On some allegations made in the House about UNESCO’s buildings being sold, Abu Jinapor denied the allegation, adding that UNESCO is currently occupying the building.

He, also, clarified that the Clerk of Parliament’s official residence alleged to have been sold in 2019, was actually sold in 2015 and cautioned against making sweeping statements about the sale of land without cross-checking from the Lands Commission.

The debate on the 2024 Budget commenced on Tuesday, 21st November, 2023, and is expected to conclude on Tuesday, 28th November, 2023.