Vice-President Mahamudu Bawumia said on November 24, 2022, that Ghana's government is developing a new strategy to purchase oil goods using gold instead of U.S. dollar stockpiles.
The decision is intended to address the declining foreign exchange reserves and the need for dollars from oil importers, eroding the local exchange rate and driving up living expenses. Crude oil and condensate production in Ghana has decreased significantly this year, 2022, compared to the previous years, according to GlobalData.
Since domestic vendors would no longer require foreign exchange to import oil-based products, utilizing gold would prevent the exchange rate from directly impacting the cost of fuel or utility services. The exchange of gold for oil represents a significant structural transformation. The suggested policy is unusual. Although nations occasionally exchange oil for other products or commodities, in most cases, the recipient is an oil-producing country rather than the other way around.
Ghana generates crude oil, but since its sole refinery shut down due to an explosion in 2017, it has been dependent on imports for refined oil products. Bawumia's declaration came as Finance Minister Ken Ofori-Atta unveiled plans to reduce spending and increase revenue to stem the tide of mounting debt.
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