The transfer is aimed toward tackling dwindling foreign exchange reserves amidst rising inflation and a weakening native forex.
Ghana’s authorities is engaged on a brand new coverage to purchase oil merchandise with gold somewhat than US greenback reserves, Vice President Mahamudu Bawumia has mentioned on Fb.
The transfer, introduced on Thursday, is supposed to deal with dwindling international forex reserves coupled with demand for {dollars} by oil importers, which is weakening the native cedi and rising residing prices.
Ghana’s Gross Worldwide Reserves stood at round $6.6bn on the finish of September 2022, equating to lower than three months of imports cowl. That’s down from round $9.7bn on the finish of final yr, in response to the federal government.
If carried out as deliberate for the primary quarter of 2023, the brand new coverage “will basically change our steadiness of funds and considerably scale back the persistent depreciation of our forex”, Bawumia mentioned.
Utilizing gold would forestall the change fee from instantly impacting gasoline or utility costs as home sellers would now not want international change to import oil merchandise, he defined.
“The barter of gold for oil represents a serious structural change,” he added.
The proposed coverage is unusual. Whereas international locations generally commerce oil for different items or commodities, such offers sometimes contain an oil-producing nation receiving non-oil items somewhat than the alternative.
Ghana produces crude oil, however it has relied on imports for refined oil merchandise since its solely refinery shut down after an explosion in 2017.
Bawumia’s announcement was posted as Finance Minister Ken Ofori-Atta introduced measures to chop spending and increase revenues in a bid to deal with a spiralling debt disaster.
In a 2023 funds presentation to parliament on Thursday, Ofori-Atta warned that the West African nation was at excessive danger of debt misery and that the cedi’s depreciation was severely affecting Ghana’s capacity to handle its public debt.
The federal government is negotiating a aid bundle with the Worldwide Financial Fund because the cocoa, gold and oil-producing nation faces its worst financial disaster in a era.