Ghana is bedeviled with consistent Petroleum price hikes especially in 2022. This had forced prices of goods and services to skyrocket for substantial number of months. The government of Ghana has announced a deliberate move to reverse the trend called ”gold for oil programme”.
This programme is targeted at buying locally 20% of gold export in Ghana Cedis through Ghana Mineral Commission and Precious Minerals Marketing Company(PMMC) and Bank of Ghana. When the gold is purchased it will be kept at Bank of Ghana vault which would further be used to buy refined oil into the country on barter system arrangement. The purchase of the gold from the local miners by the PMMC and Bank of Ghana would be based on the spot price or going price or internationally accepted price in Ghana Cedis.
After, the refined oil would be sold to the Oil Marketing Companies(OMCs) in Ghana Cedis also based on the spot price.
The implications are that;
1. The pressure on the cedi would be reduced. It would help the cedi to either appreciate or stabilize. The huge amount which should be used to buy refined oil outside the country in dollars is avoided.
2. Normally OMCs price their products based on the forex and this would be prevented and so invariably the petroleum products prices may be dwindling which in turn increase the economic health of Ghana. This would naturally force prices on goods and services to reduce.
According to the Minister of Lands and Natural Resources, Samuel Abu Jinapor the policy shall take effect on the 15th January,2023 per the agreement reached with the stakeholders. It seemingly looks like a good policy, however, let see how the implementation would go.