The Bank of Ghana (BoG) is contemplating a shift in strategy by potentially entrusting commercial banks with the implementation of the Gold for Oil Policy.This move comes as the Central Bank reevaluates its role, aiming to prioritize core functions such as monetary policy and price stability maintenance.Dr.

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Ernest Addison, Governor of the Central Bank, emphasized the strategic value of the Gold for Oil Policy in bolstering the country’s reserves.“It is a programme that we recommend to continue because it helped us in the period of crisis. We only want to make sure that this is done by a commercial bank so that we can have time to focus on our operations as a central bank.

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So this is the discussion that we are holding going forward but the ability to be able to exchange our natural resource directly for oil when oil prices get out of hand, we think that it is a very innovative programme.”He reiterated the long-term benefits of the initiative, asserting its positive contribution to Ghana’s economic stability and development.

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“So it is really about the central bank spreading itself too thin by trying to add gold for oil also into our business but we are fully focused on buying gold to build our reserves”, the Governor said to the Public Accounts Committee in Parliament.Speaking before the Public Accounts Committee in Parliament, Dr. Addison articulated the rationale behind the potential transition.

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He stressed the importance of streamlining the central bank's focus while ensuring the continuity of a program that proved valuable during crises.Despite acknowledging the limitations, Dr. Addison reaffirmed the Central Bank's support for the government's Gold4Oil policy, citing its instrumental role during economic challenges.

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“This is an intervention which was very critical in the heat of the crisis, yes the foreign exchange market is functioning better than it was in 2022. Oil prices have come down much better than they were in 2022. The situation is much better now than it was in 2022 when the Gold4Oil policy was introduced.

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“However, we think that it’s still an important programme for the government to have that option and to be able to empower commercial banks to undertake their activities. Should market sentiments change, which do every day, we don’t know what will happen tomorrow. And we will wake up and if we find ourselves in a situation where the prices are driving the pumps to where they were again. The government has an option to fall on.

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It’s a very innovative instrument.”He highlighted the program's effectiveness in managing oil price fluctuations and hinted at potential enhancements to Ghana's gold reserves.“There is going to be a big jump in gold holdings for Ghana,” he assured.

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The envisaged handover to commercial banks signifies a strategic realignment aimed at optimizing operational efficiency within the banking sector while maintaining a robust economic safeguard for Ghana's energy needs.

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