Ghana needs to purchase oil with gold as a substitute of the US greenback - Geo Tv News

Ghana needs to purchase oil with gold as a substitute of the US greenback

Ghana is scuffling with declining overseas change reserves. Will this transfer cut back the depreciation of the Ghanaian forex?

Ghana is experiencing one of many worst financial crises in a technology. In an try to guard its economic system and forex, it’s resorting to all kinds of measures. This ranges from negotiating help with the Worldwide Financial Fund to the most recent information about efforts to purchase oil merchandise with gold as a substitute of the US greenback.

The nation’s overseas change reserves are falling considerably

Utilizing gold as a substitute of the US greenback ought to assist the nation defend its overseas change reserves, that are quickly thinning. Whereas Ghana had about $9.7 billion in overseas reserves on the finish of final yr, it was all the way down to $6.6 billion on the finish of September this yr. This may cowl Ghana’s present quantity of oil and petroleum product imports for about 3 months.

On his Fb web page, Vice President Dr Mahamudu Bawumia mentioned.

“The barter of sustainably mined gold for oil is likely one of the most necessary financial coverage adjustments in Ghana since its independence.”

If the transfer goes via and is certainly applied, the commerce ought to be absolutely operational within the first quarter of 2023.

Golden Pumpjack And Spilled Oil On The Cash

A whole lot of issues may get cheaper in Ghana

If this technique is efficiently rolled out, Ghana may see a major enchancment in its steadiness of funds and a discount within the depreciation of the nationwide forex, which might assist curb the rise within the costs of frequent gadgets. The Vice President commented on this.

“If we implement it as envisioned, it is going to basically change our steadiness of funds and considerably cut back the persistent depreciation of our forex with its related will increase in gasoline, electrical energy, water, transport, and meals costs.”

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He went on to clarify why that is so.

“It is because the change charge (spot or ahead) will not immediately enter the method for the willpower of gasoline or utility costs since all of the home sellers of gasoline will not want overseas change to import oil merchandise.”

Nonetheless, this vital change must be authorised by numerous different establishments and so we could not but see closing implementation. Nonetheless, as this transfer may tremendously assist Ghana in its present troublesome state of affairs, a main effort can be made to finish this outstanding change.

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