Ghana Takes Steps to Operationalize Gold-for-Oil Scheme — Move Expected to Help Halt Cedi’s Depreciation

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According to directives issued by Samuel A. Jinapor, the Ghanaian curate for lands and earthy resources, large-scale golden mining companies volition beryllium required to “sell 20% of each refined golden astatine their refineries to the Bank of Ghana.” A gold-for-oil strategy is portion of the Ghanaian government’s program to halt the further dwindling of the country’s overseas speech reserves.

Bank of Ghana to Use Cedi to Pay for Gold

Following the revelation that Ghana plans to bargain lipid products utilizing gold, Samuel A. Jinapor, the country’s curate for lands and earthy resources, announced connected Nov. 25 that starting successful 2023, large-scale mining companies “shall merchantability 20 per cent (20%) of each refined golden astatine their refineries to the Bank of Ghana.” Payments for the golden volition beryllium made utilizing the section currency — the cedi — and volition beryllium “at spot terms with nary discounts.”

According to a Facebook post shared by Ghanaian vice president Mahamudu Bawumia, the Bank of Ghana (BOG) and the Precious Minerals Marketing Company (PMMC), volition enactment with the mining companies to guarantee their compliance with the directive. Concerning Ghana’s alleged assemblage mining schemes (CMS), the authorities said these volition beryllium required to merchantability their “gold outputs to authorities done PMMC.”

To guarantee compliance, Jinapor stipulated that “mining licenses for CMS shall see a clause mandating licensees to merchantability their golden output to government.” According to the directives issued by Jinapor, each licensed small-scale golden miners volition beryllium subjected to conditions that are akin to those imposed connected assemblage mining schemes.

Ghana’s Dwindling Foreign Exchange Reserves

Meanwhile, successful an earlier station that revealed Ghana’s gold-for-oil plan, Vice President Bawumia insisted specified a determination would assistance sphere the country’s depleting overseas speech reserves. He added:

The barter of sustainably mined golden for lipid is 1 of the astir important economical argumentation changes successful Ghana since independence. If we instrumentality it arsenic envisioned, it volition fundamentally alteration our equilibrium of payments and importantly trim the persistent depreciation of our currency with its associated increases successful fuel, electricity, water, transport, and nutrient prices.

By reducing oregon eliminating the usage of U.S. dollars erstwhile importing lipid products, Ghana volition efficaciously tackle 1 of the cardinal factors down the cedi’s accelerated depreciation, Bawumia argued. As reported by Bitcoin.com News, the Ghanaian currency’s accelerated diminution since the commencement of 2022 has seen it being named the world’s worst-performing currency.

While Jinapor’s directives to golden mining companies are being framed arsenic a transmission that helps “local golden refineries get golden supplies from PMMC to enactment their operations,” immoderate of Bawumia’s followers connected the societal media level person criticized the projected gold-for-oil policy.

Reacting to the Ghanaian vice president’s post, Facebook idiosyncratic Naji Alhassan said: “These are not bully measures. These are window-dressing to delight the bourgeois class. The champion mode to spell is to ain astatine slightest 50% of our golden and besides a golden refinery to refine our gold. Very soon, the bourgeois people volition deplete each the golden that the Bank of Ghana volition beryllium buying. We privation pragmatic measures.”

However, immoderate of Bawumia’s followers, similar Mohammed Hashiru, applauded the determination which they claimed would halt “imperialists from utilizing their worthless papers to control, manipulate and destruct our economies.”

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