Vice President Dr Mahamudu Bawumia, the Head of Ghana’s Economic Management Team, lashed out at critics of the government’s gold-for-oil strategy on Wednesday, March 15, 2023.
The vice president lauded the strategy’s success, which is now in its third month of execution, and stated that the country will reap additional benefits from the policy, which will ultimately help stabilize the currency rate and fuel prices.
“We have to understand, the prices of fuel will go up and will come down. But what we expect to see under the Gold-For-Oil Policy is more stability in the pricing and also savings in foreign exchange. There is more to come, this is the third month of the operation of the policy.
“Some people said it will not work; Ghana does not have enough gold. How can you say that? We’ve been mining this gold for 200 years; they keep taking it out and it cannot work for us? It doesn’t make sense.
“There are people who are very disappointed that it is working but bleeding is allowed. We have an impossibility mindset. They can keep to it, for us all things are possible by the grace of God.”
According to the Vice President, when the policy is optimized to cover 100% of the country’s foreign imports by the end of the year, the country will save around US$4.8 billion in foreign money.
“I’ve been told that next week we are likely to see a reduction in fuel prices and next week is actually not far. It is tomorrow. Tomorrow we will see the decline in prices that we expect. This is remarkable. Two and a half months ago you were at 23 cedis and today you are at 12 cedis per litre and falling. That is a good point.
“But let me note that the most important aspect of the Gold-for-oil policy is not just the reduction in fuel prices. But the most important aspect is the savings in foreign exchange that the Bank of Ghana will make as a result of the lower demand for forex to import oil.
“That saving is huge, we are currently importing about 50 to 60 per cent of oil under this policy, the goal is to move to 100% and that will be done this year,” the vice president stated while commissioning a new head office for the state-owned Bulk Oil Storage and Transportation Company Limited (BOST).
Gold-for-oil policy
Dr. Bawumia proposed a new government policy known as gold-for-oil last year. According to the government, the policy is to allow the government to pay for imported oil products with gold, in direct barter using gold purchased by the Central Bank.
Despite its expected consequence, the policy has been heavily criticised.
Kennedy Ohene Agyapong, a flagbearer candidate for the ruling New Patriotic Party (NPP), recently criticised the government’s Gold-for-Oil strategy in a radio interview.
Kennedy Agyapong advocated that, rather than selling raw gold, the government should refine the mineral and add value to it before selling it.
Ken Agyapong commented on the gold-for-oil strategy, saying, “Does it make sense to you to buy oil with gold? “Why don’t you sell your gold, make some money, and then go buy some oil?”
The congressman was also disappointed with party members who supported and defended the strategy. He also stated that he did not attend school, but that the government may do basic things to purchase the oil.
“I didn’t go to school but I know Economics. There are simple things that we can do. And I’m surprised, we say we have the men and we are hailing this? We are hailing gold for oil? Jesus Christ! We need to move, move,” he said.
