The Bank of Ghana has confirmed that the government’s Gold for Oil program is on track, as intended.
This initiative aims to tackle Ghana’s dwindling foreign exchange reserves and the strong demand for US dollars by oil importers, which has been putting pressure on the Cedi and increasing living expenses.
On Monday, August 12, Dr. Maxwell Opoku-Afari, the First Deputy Governor of the Bank of Ghana, presented an update on the policy’s progress to the Public Accounts Committee of Parliament.
“The gold for oil programme is on track and the reason why the risk for the separate account is mitigated somehow is that the Central Bank’s participation in terms of financial contribution to the gold for oil is capped and nothing more is being added to that.
“So it is the receivables that are coming from within that cap amount that has been used to continue to finance the gold for oil programme,” he Said.
The Gold for Oil policy enables the government to pay for oil imports using gold, either through direct barter or by selling gold for foreign exchange.
The policy, outlined in the G40 Programme Framework, operates through two channels. In the barter channel, the Bank of Ghana provides gold directly to suppliers in exchange for oil products.
In the Broker Channel, the Bank of Ghana sells gold to a broker, who then provides the foreign exchange needed to pay for the oil imports. This approach aims to reduce Ghana’s reliance on foreign currency and stabilize the economy.