Bawumia's gold-for-oil initiative is an 'excellent idea' – Kwame A Plus

Controversial political activist, Kwame Asare Obeng, popularly known as A Plus, has given his seal of approval to the government of Ghana plan to use gold to purchase refined oil from the international market instead of the United States dollar.

According to A Plus, the idea, largely conceptualised by Vice President Dr Mahamudu Bawumia, is an ‘excellent’ idea and worthy of applause.

A Plus wrote on Facebook: “Let’s have a conversation: For over 100 years, Ghana has been a leading producer of gold in the world, yet we are always in dire need of a paper (dollar) to import petroleum products. I think the oil for gold initiative is an excellent idea ???? Africa has all the natural resources the west needs. Why do we trade in dollars?”

Kwame A Plus put the question up for discussion and whilst many followers agreed with his prognosis, others also called for Ghana to start refining its own crude by reestablishing the Tema Oil Refinery (TOR).

The Gold for Oil policy was first announced by Ghana’s Vice President, Dr Mahamudu Bawumia, in a post on Facebook on on November 24th, 2022.

Dr Bawumia 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, 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,”

The Vice President continued: “If we implement 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 is because the exchange rate (spot or forward) will no longer directly enter the formula for the determination of fuel or utility prices since all the domestic sellers of fuel will no longer need foreign exchange to import oil products.

“The barter of gold for oil represents a major structural change. My thanks to the Ministers for Lands and Natural Resources, Energy, and Finance, Precious Minerals Marketing Company, and the Governor of the Bank of Ghana for their supportive work on this new policy.

“We expect this new framework to be fully operational by the end of the first quarter of 2023. God bless our homeland Ghana.”