The Bank of Ghana (BoG) has confirmed that the government’s Gold for Oil policy is advancing as planned. This initiative, launched to address Ghana’s declining foreign currency reserves and the high demand for dollars by oil importers, aims to stabilize the Cedi and reduce living costs.
Dr. Maxwell Opoku-Afari, the First Deputy Governor of the BoG, provided an update on the policy during a session with the Public Accounts Committee of Parliament on Monday, August 12.
He assured that the program is on track, with the Central Bank’s financial contribution to the initiative carefully managed to mitigate risks.
The Gold for Oil policy allows the government to pay for imported oil products using gold, through a direct barter system facilitated by the gold purchased by the Central Bank.
According to the government’s framework, payment for the oil supply can be made either through a direct barter of gold for petroleum products or by selling gold to a broker to obtain the necessary foreign exchange.
Under the barter trade option, oil suppliers willing to accept gold in exchange for petroleum products receive the equivalent volume of gold from the Bank of Ghana.
In the broker channel, the BoG sells gold to a broker, who then provides the foreign currency needed to pay for the oil imports.
The policy is designed to reduce the pressure on Ghana’s foreign currency reserves and stabilize the local currency by minimizing the demand for dollars in oil transactions.
