According to the Bank of Ghana (BoG), the government’s Gold for Oil Policy is progressing as planned. The government started the program to deal with Ghana’s running out foreign exchange reserves and the strong demand for dollars from oil importers, which was pushing down the Cedi and increasing living expenses.
During an appearance before the Public Accounts Committee of Parliament on Monday, August 12, the First Deputy Governor of the Bank of Ghana, Dr. Maxwell Opoku-Afari, provided an update on the policy.
First Deputy Governor of the Bank of Ghana, Dr. Maxwell Opoku-Afari, gave an update on the policy on Monday, August 12, while testifying before 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 somehow mitigated is that the Central Bank’s participation in terms of financial contribution to the gold for oil program is capped and nothing more is being added to that” he said
According to the government, the purpose of the Gold for Oil program is to enable direct barter between the government and the Central Bank using gold that the Central Bank has bought to pay for imported oil goods.
“So it is the receivables that are coming from within that cap amount that have been used to continue to finance the gold for oil programme.” he added
The government’s G40 Programme Framework, dated February 3, 2023, outlines the strategy and states that there are two ways to pay for the oil supply: barter trading or using FX earned by selling gold to a broker.
The Bank of Ghana (BoG) will supply suppliers who are prepared to accept gold in direct exchange for petroleum products with the same amount of gold under the barter trade.
The BoG carries out a gold supply agreement through the Broker Channel, selling gold to a gold broker who offers FX cover to pay for petroleum products.
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