Ghana plans to purchase oil with gold as a substitute of U.S. {dollars} - Geo Tv News

Ghana plans to purchase oil with gold as a substitute of U.S. {dollars}

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ACCRA — Ghana’s authorities is engaged on a brand new coverage the place gold fairly than U.S. greenback reserves will likely be used to purchase oil merchandise, Vice-President Mahamudu Bawumia mentioned on Fb on Thursday.

The transfer is supposed to deal with dwindling overseas foreign money reserves coupled with demand for {dollars} by oil importers, which is weakening the native cedi and growing residing prices.

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Ghana’s Gross Worldwide Reserves stood at round $6.6 million on the finish of September 2022, equating to lower than three months of imports cowl. That’s down from a inventory place of round $9.7 million on the finish of final yr, in accordance with the federal government.

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If applied as deliberate for the primary quarter of 2023, the brand new coverage “will basically change our stability of funds and considerably cut back the persistent depreciation of our foreign money,” Bawumia mentioned.

Utilizing gold would forestall the change price from immediately impacting gas or utility costs as home sellers would not want overseas change to import oil merchandise, he defined.

“The barter of gold for oil represents a significant structural change,” he added.

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 spiraling debt disaster.

In a 2023 finances presentation to parliament on Thursday, Ofori-Atta warned the West African nation was at excessive danger of debt misery and that the cedi’s depreciation was severely affecting Ghana’s capability to handle its public debt.

The federal government is negotiating a reduction bundle with the Worldwide Financial Fund because the cocoa, gold and oil-producing nation faces its worst financial disaster in a era. (Reporting by Cooper Inveen and Christian Akorlie Writing by Sofia Christensen Enhancing by Estelle Shirbon, James Macharia Chege and Josie Kao)

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