The Bank of Ghana (BoG) has affirmed that the government’s Gold for Oil policy is progressing as planned.
This initiative was introduced to address Ghana’s dwindling foreign currency reserves and the strong demand for dollars by oil importers, which has been putting pressure on the Cedi and increasing the cost of living.
Appearing before the Public Accounts Committee of Parliament on Monday, August 12, Dr. Maxwell Opoku-Afari, the First Deputy Governor of the Bank of Ghana, provided an update on the policy.
“The Gold for Oil program is on track, and the reason the risk associated with the separate account is somewhat mitigated is that the Central Bank’s financial contribution to the program is capped, with no additional funds being added. The funds within this cap are being used to continue financing the Gold for Oil program.”
The Gold for Oil policy, as outlined by the government, enables the payment for imported oil products with gold, through a direct barter with gold purchased by the Central Bank.
According to the government’s G40 Programme Framework dated February 3, 2023, the policy outlines two payment channels for oil supply: barter trade or forex obtained from selling gold to a broker.
In the barter channel, suppliers willing to accept gold in direct exchange for petroleum products receive the equivalent volume of gold from the Bank of Ghana (BoG).
In the Broker Channel, the BoG enters into a gold supply agreement, selling gold to a broker who then provides forex to pay for petroleum products.
