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Alex Mould raises alarm on government’s Gold for Oil initiative

12308958 Former CEO of Ghana National Petroleum Commission, (GNPC), Alex Mould

Thu, 26 Jan 2023 Source: Alex Mould

What is this Gold for Oil (G4O) really all about? Key players that control government, have devised a cunning ploy to take a share of both markets:

- the export of Ghana’s gold

- the import of petroleum products

Thus these beneficial players - soon to be identified - are taking market share in both gold exports and petroleum products imports under the guise of government policy using government institutions and even the Regulators of these sectors!

Is the oil import program under this G4O deal going to be a long-term contract with only one International Oil-Trading Company (IOTC), or will there be bidding for each cargo?

More importantly, the bidding process must be open and transparent.

The first 41,000 metric tons (tonnes or MT) of petroleum products imported was brought in by LITASCO.

On this first G4O cargo contract, did it go through a public procurement bidding process? Was it open and transparent ??

Who represents LITASCO in Ghana? And, who is the beneficial representative?

*BoG Risks Exposure in this G4O transaction *

Bank of Ghana is the most exposed government institution in this G4O deal.

The importer on record, BOST, who is directly exposed to the credit risk of the BDCs, does not give cover to BoG via the provision of a bank letter of credit/guarantee.

In this G4O BoG then uses the foreign exchange obtained from the sale of gold (which would normally then flow into the banking system in Ghana) to pay for the petroleum products imports.

BoG is taking the direct risk exposure to buy the oil on behalf of BOST who then takes delivery of the oil and then sells to GoENERGY (and, maybe, some other BDCs) who should then provide some financial guarantee to BOST to cover credit and operational risk.

BoG is using gold reserves or buying gold from small-scale/community miners using Govt money, or by giving a loan to Govt (PMMC) from BoG balance sheet to buy the gold.

While all the underlying transactions may be legal, certain government players and advisors are using their influence to direct government policy as well as government institutions including the Regulator, to muscle out existing players in order to enrich themselves;


Columnist: Alex Mould