Ghana to purchase oil with gold as foreign cash reserves dwindle

Robert Besser
26 Nov 2022, 17:15 GMT+10

Ghana's Vice-President, Mahamudu Bawumia, said on Facebook this week that due to dwindling foreign currency reserves, the country's government is drafting a new policy to purchase oil products using gold, rather than U.S. dollar reserves.
The move is also meant to deal with demands for dollars by oil importers, which is weakening Ghana's currency, the cedi, and increasing living costs.
According to the government, at the end of September 2022, Ghana's Gross International Reserves totaled some $6.6 billion, less than three months of payments for imports.

ACCRA, Ghana: Ghana's Vice-President, Mahamudu Bawumia, said on Facebook this week that due to dwindling foreign currency reserves, the country's government is drafting a new policy to purchase oil products using gold, rather than U.S. dollar reserves.

The move is also meant to deal with demands for dollars by oil importers, which is weakening Ghana's currency, the cedi, and increasing the cost of living.

According to the government, at the end of September 2022, Ghana's Gross International Reserves totaled some $6.6 billion, less than three months of payments for imports and down from some $9.7 billion at the end of last year.

If implemented as planned during the first quarter of 2023, the new policy "will fundamentally change our balance of payments and significantly reduce the persistent depreciation of our currency," Bawumia said.

He added that as domestic sellers would no longer need foreign exchange to import oil products, using gold would prevent the exchange rate from directly impacting fuel or utility prices.

Since its only refinery shut down after an explosion in 2017, Ghana has relied on imports for refined oil products, despite being a crude oil producer.

In an effort to tackle a spiraling debt crisis, Ghana's Finance Minister, Ken Ofori-Atta, also announced measures to cut spending and boost revenues.

As the cocoa, gold and oil-producing country is facing its worst economic crisis in a generation, the Ghanian government is negotiating a relief package with the International Monetary Fund.

Watch latest videos

News RELEASES

Publish news of your business, community or sports group, personnel appointments, major event and more by submitting a news release to Jamaican Times.

More Information

28 ℃

Fair in Kingston

Business

Section

Tech stocks lead U.S. markets rally, Nasdaq Composite climbs 191 points

NEW YORK, New York - A slowing of wages growth in the fourth quarter, as reported by the Labor Department, ...

Profits down 9% at American Express due to late customer payments

NEW YORK CITY, New York: As it sets aside more funds to cover potentially bad loans, American Express announced that ...

UK airline Flybe goes out of business, cancels all flights

LONDON, England: Flybe, a British regional airline, abruptly closed operations on January 28. The airline offered flight to Belfast, Birmingham ...

Mobileye forecasts higher revenue in 2023

JERUSALEM, Israel: As demand for its driver-assistance technology rises among vehicle-makers, Mobileye Global is forecasting revenues for the 2023 fiscal ...