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Ghana’s ‘Gold for Oil’ Policy Saves $4.8 Billion in Foreign Exchange Annually, VP Bawumia Reveals

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The Vice President of Ghana, Dr. Alhaji Mahamudu Bawumia, has disclosed that the government will be able to save about US$4.8 billion yearly in foreign exchange through the successful implementation of the “Gold for Oil” policy. The policy, which was introduced last year, is a vital macroeconomic intervention that was put in place to tackle the balance of payments crisis, the depreciation of the exchange rate, and the hike in prices of fuel, utility, transport fares, and food items.

Dr Bawumia made this statement during the inauguration of the new head office of Bulk Oil Storage and Transportation (BOST) Company at South Legon in Accra. The policy enables oil-importing companies and bulk distribution companies (BDCs) to use gold instead of the US dollar to purchase petroleum products.

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He explained that the policy was an innovative and progressive one that allowed the government to stem the tide on the spiraling rate of forex. Vice President Bawumia added that the “Gold for Oil” policy would reduce the country’s need for forex by about USD4.8 billion yearly, leading to significant savings on the prices at the pump.

The Vice President also mentioned that the policy became necessary last year when Ghana was facing a balance of payment challenge, and the foreign exchange reserves at the Bank of Ghana were dwindling, while oil importing companies needed forex to import petroleum products. He said that currently, 50 to 60 per cent of the country’s oil import was from the “Gold for Oil” policy and was expected to hit 100 per cent by the end of 2023.

Dr Bawumia, assuring Ghanaians, said that the government would continue to bring in more innovations that would revitalize the economy. He commended the Board and Management of BOST for their leadership and commitment to duty, adding that public enterprises could be significant sources of revenue for the government to support national development programs if the right leadership was in place.

Mr Ekow Hackman, the Board Chair of BOST, also spoke about the challenges the company faced when he took over in 2017, such as debt of $624 million, dysfunctional barges and pipelines, and non-operational depots. However, he said that with the Board and Management implementing efficient corporate governance programs, they had turned around the fortunes of the company for the better.

In conclusion, the “Gold for Oil” policy is an excellent initiative that will help save the country a lot of forex, which can be utilized to support other important developmental projects. It is refreshing to see that the government is thinking outside the box and coming up with innovative solutions to the country’s economic challenges. The future looks promising for Ghana, and Ghanaians can look forward to more groundbreaking innovations in the future.

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