By: John Guamah Amanor
Energy Analyst, Benjamin Nsiah has asserted that the feasibility of government’s “Gold for Oil” policy statement depends on the implementation frameworks.
The batar “Gold for Oil” is a government policy aimed at tackling dwindling forex reserves amidst rising inflation and a weakening local currency.
“Government is working on a new policy to buy oil products with gold rather than US dollar reserves”, Vice President Mahamudu Bawumia posted on Facebook on 24th November.
“If implemented as planned for the first quarter of 2023, the new policy will fundamentally change our balance of payments and significantly reduce the persistent depreciation of our currency” he stated.
Mr. Benjamin Nsiah in an interview on Uniiq Breakfast Drive opined that it will be difficult for government to reach an agreement with the western world with respect to the “Gold for Oil” policy.
He explained that the western economies especially America is built on the Dollar and therefore such a policy will be considered as one that devalues their currency.
“From the look of things its going to be difficult for government to have any Government to Government arrangement with respect to ‘gold for oil’ with companies in the Western world. Mr Benjamin Nsiah has said.
They will not be ready to buy it because it will be a devaluing to their currencies”.
Data shows that Ghana’s Gross International Reserves stood at around $6.6bn at the end of September 2022, equating to less than three months of imports cover.
That is down from around $9.7bn at the end of last year, according to the government.