First consignment under gold-for-crude initiative to arrive next week – Mireku Duker

Deputy Lands and Natural Resources Minister, Mireku Duker has said that the first consignment under the gold for crude initiative will arrive into the country next week.

He said this to journalists after the Minister of Lands and Natural Resources, Samuel Abu Jinapor, led a team to pay a courtesy call on the management of the Ghana Chamber of Mines on Tuesday January 10.

“We have put all the lines together and we believe that we are ready to kick start it,” he said.

He added “It is good and will help to cushion our currency, so all must support it.”

The government of Ghana is seeking to buy crude oil with gold.

This is an attempt by the country to move away from the US dollar for international transactions.

The Vice President Dr Mahamudu Bawumia who announced this move stated at the 2022 Association of Ghana Industries (AGI) Awards in Accra, that the programme will give Ghana the space to accumulate more international reserves as the country will save the $3 billion it spends on oil imports.

He further stated that the use of gold was specifically for oil imports in the face of declining foreign exchange reserves.

Unfortunately, some people have misinterpreted this as Ghana being against the use of the US dollar in international transactions,” he stated.

“Far from it. We want to accumulate more US dollar reserves in the future.”

Vice President Bawumia noted that a major source of Cedi depreciation has been the demand for forex to finance imports of oil products and to address this challenge, government is negotiating a new policy regime where sustainably mined gold will be used to buy oil products.

“We implement the gold-for-oil policy as it is envisioned, it will fundamentally change our balance of payments and significantly reduce the persistent depreciation of our currency with its associated increases in fuel, electricity, water, transport and food prices.”

This, he noted, is because the exchange rate will no longer directly enter the formula for the determination of fuel or utility prices since all the domestic sellers of fuel will no longer need foreign exchange to import oil products.

Source: 3news.com