The Bank of Ghana (BoG) has stated that the country has sufficient gold reserves to support the government’s gold-for-oil policy.
Stephen Opata, the BoG’s Director of Financial Markets, stated this when he appeared before Parliament’s Public Accounts Committee (PAC) on Monday, January, 16,2023.
Opata stated that the central bank is well-positioned to meet the deal’s demand for 160,000 ounces of gold per month.
“As for the quantities, based on the production numbers we saw last year, gold has picked up. We believe that we can buy enough gold to sustain the programme,” he said.
Additionally, he said that “I must say that the numbers we are currently looking at is about 160,000 ounces per month and that will represent about 50% to 60% of the consumption of the country. According to what PMMC indicates, I think we have volumes to support the programme.”
In November 2022, the government announced plans to purchase oil products with gold rather than US dollars through the vice president.
Vice-President Bawumia stated that the gold for oil policy was intended to address dwindling foreign currency reserves as well as the demand for dollars by oil importers, which was weakening the local cedi and raising living costs.
“It will fundamentally change our balance of payments and significantly reduce our currency’s persistent depreciation,” Bawumia said.
He went on to say that using gold would keep the exchange rate from directly impacting fuel or utility prices because domestic sellers would no longer need foreign currency to import oil products.
The first shipment of oil under the government’s gold for oil policy has already arrived at Tema Port and been discharged into the Bulk Oil Storage and Transportation Company’s receptacles (BOST).
BOST will sell the 41,000 metric tonnes of petroleum products delivered by SCF YENISEI to bulk distributing companies (BDCs) throughout Ghana.
The deal, worth $40 million, was negotiated by the economic management team led by Vice-President Mahamudu Bawumia.
The Precious Minerals Marketing Company (PMMC) has also stated its willingness to open offices in specific mining regions to increase gold trading as the government’s ‘gold for oil policy’ gains traction.
All gold from small-scale mining companies must be sold to the government through the PMMC as part of the implementation.
According to a company statement issued on Monday (16 January), “to implement the directives, PMMC shall establish offices in selected mining regions, the first of which has already been established in Kumasi, in the Ashanti Region.”
“All existing gold trading and export license holders (“Implementing Partners”) shall continue their usual business activities except that the gold so purchased by them from the small-scale sector shall not be exported. The gold purchased by the Implementing Partners will be sold to PMMC, according to the statement.
