The Minority in Parliament has expressed concerns that the Gold-for-oil policy of the government is going to cause problems for the Bank of Ghana (BoG).
Deputy Minority Leader Emmanuel Kofi Armah Buah said the policy would lead to huge debts for the central bank.
He was reacting to a comment by Vice President Dr Mahamudu Bawumia that the policy has stabilized the exchange rate and also resulted in a fall in fuel prices.
Speaking in Parliament on Thursday, March 16, the Ellembelle MP said “There is nowhere in this world where we do barter trade for oil, somebody should tell me where you take your gold and then you take the oil, there is nowhere in this world. So there is nothing like gold for oil.
“The Vice President is saying that petroleum prices are going down because of gold for oil, he is a vice president and he wants to be president, and so I am going to be very charitable but frankly, his advisors should advise him. The reason why petroleum prices have gone down is that crude prices were over 100 dollars and it got down to 72 dollars per barrel globally, it has nothing to do with Bawumia, it has nothing to do with gold for oil. It is shocking, it is unthinkable and this must be investigated.”
He added “Gold-for-oil is going to expose the Bank of Ghana to huge debt.”
Dr Bawumia had stated that the Gold-for-Oil policy that was introduced by the government has stabilized the Exchange Rate and also resulted in a decline in fuel prices.
Dr Bawmuai added that the most important aspect of the policy is not just the reduction in fuel prices, but the savings in foreign exchange that the Bank of Ghana will make as a result of the lower demand for forex to import oil.
Speaking at a forum organized by the Bulk Oil Storage and Transformation (BOST) company in Accra, on Wednesday, March 15, Dr Bawumia said “I am happy to note that the Gold-for-Oil policy is the first policy of its kind in Ghana since independence to address this type of balance of payment crisis that we face. In my humble opinion, this is the most important macroeconomic policy intervention to deal with the exchange rate depreciation, fuel prices, food prices, and inflation nexus that we have had.
“As a result of the policy, we have not only seen a decline in the price from 23 Cedis per liter to around 12 Cedis per liter, we have also seen stability in the exchange rate as we predicted. I say all thanks should go to the Ministry of Energy, to BOST, to NPA, the Bank of Ghana, the Ministry of Lands and Natural Resources and the PMMC who rose up to the occasion when we faced those crises of rapidly depreciating currency along with rapidly increasing fuel, transportation, and food prices.”
Dr Bawumia said: “The most important aspect of the gold-for-oil policy is not just the reduction in fuel prices, but the most important aspect is the savings in foreign exchange that the Bank of Ghana will make as a result of the lower demand for forex to import oil. That saving is huge. We are currently importing about 50 to 60 percent of oil under this policy, the goal is to move to 100 percent and that will be done this year.”
He added “We have to understand that prices of fuel will go up and will come down but what we expect to see under the Gold-for-Oil policy is more stability in the pricing and also savings in foreign exchange.
“There is more to come, this is the third month of operation of the policy, some people said it will not work, and Ghana doesn’t have enough gold. How can you say that? We have been mining this gold for 200 years, and they keep taking it out and it cannot work for us?
“It doesn’t make sense. There are people who are very disappointed that it is working but bleeding is allowed. We have an impossibility mindset, and they can keep to it, for us all things are possible by the grace of God.”