First consignment of gold-for-oil policy delivered to Ghana, valued at $40m – Report

Ghana has received about 41,000 million metric tons of petroleum products under government’s Gold-For-Oil policy as part of efforts to provide enough petroleum products for consumers and address the cedi’s depreciation against major trading currencies.

According to Graphic Online, the consignment which is valued at around $40 million, was delivered by oil products tanker SCF YENISEI to the Tema Port.

The petroleum products is expected to be discharged and sold by state-owned enterprise BOST to Bulk Oil Distributing Companies (BDCs) across the country.

Vice President, Dr. Mahamudu Bawumia in November 2022 first announced government’s plan to undertake the gold-for-oil initiative. The deal was hinged on buying oil products with Ghana’s gold instead of the US dollar.

Dr. Bawumia on Facebook earlier explained that the usage of gold to purchase oil would also address Ghana’s dwindling foreign reserves as well as reduce demand for US dollars by oil importers.

“It will fundamentally change our balance of payments and significantly reduce the persistent depreciation of our currency,” the Vice President earlier wrote.

Under the policy, government believes that using gold to purchase oil products would also bring stability to the exchange rate market and ensure domestic oil operators do not solely depend on foreign exchange to import products.

Meanwhile, Graphic Online reports that the proceeds from the gold-for-oil policy will be paid into an escrow account at the Bank of Ghana for the procurement of gold for the process.

MA/FNOQ