The Vice President of Ghana, Mahamudu Bawumia has revealed that the country is currently developing a new strategy that would enable it purchase oil products with gold rather than the U.S. dollar reserves.
This was made known to Ghanaians through a Facebook post on Thursday, November 24 and according to Bawumia, the decision is geared towards both addressing Ghana’s declining foreign exchange reserves and the demand for dollars from oil importers. These issues had culminated towards weakening the local currency -cedi, and skyrocketing living expenses.
Ghana has of recent, been facing one of its worst economic crises. According to Reuters, Ghana’s Gross International Reserves stood at about $6.6bn as at September 2022’s end, amounting to not more than three months of imports cover. That is a decreased figure from about $9.7bn that was calculated at the end of last year, according to the government.
Meanwhile, Bawumia had said: “If implemented as planned for the first quarter of 2023, the new policy will instrumentally change our balance of payments and fundamentally reduce the persistent depreciation of our currency.”
He had further explained that using gold would bar the exchange rate from directly impacting fuel or utility prices as domestic sellers would no longer need foreign exchange to import oil products.