Bank of Ghana (BoG) has confirmed that the Gold for Oil policy introduced by the government is advancing according to schedule.

This initiative was implemented to tackle Ghana’s declining foreign currency reserves and the significant dollar demand from oil importers, which was negatively impacting the Cedi and increasing living expenses.

In a report to the Public Accounts Committee of Parliament on Monday, August 12, Dr. Maxwell Opoku-Afari, the First Deputy Governor of the Bank of Ghana, offered an update on the progress of the policy.

“The gold for oil programme is on track and the reason why the risk for the separate account is mitigated somehow is that the Central Bank’s participation in terms of financial contribution to the gold for oil is capped and nothing more is being added to that.

“So it is the receivables that are coming from within that cap amount that has been used to continue to finance the gold for oil programme.”

The Gold for Oil policy, as outlined by the government, involves settling payments for imported oil products with gold, facilitated through direct exchanges with gold acquired by the Central Bank.

The G40 Programme Framework, dated February 3, 2023, details the policy’s execution, which involves two payment methods: barter trade or using foreign exchange obtained from selling gold to a broker.

In the barter method, suppliers who agree to accept gold in exchange for petroleum products receive the equivalent amount of gold from the Bank of Ghana (BoG).

Alternatively, through the Broker Channel, the BoG enters into a gold supply agreement where it sells gold to a broker, who then provides the foreign currency needed to pay for the petroleum products.