Government’s decision to trade its gold resources for refined oil has been met with overwhelming opposition.

Commenting on the government's decision, Alliance for Social Equality and Public Accountability (ASEPA) intimated that barter trading gold for oil would have a negative impact on Ghana’s forest reserve.

Explaining this, the Executive Director of ASEPA, Mensah Thompson, noted that gold is a commodity with exceptionally high price volatility on the global market, which meant that if the commodity price dropped, the government would require more gold to buy oil.

In such situations, he says,  there will be a mad rush for gold, thus exposing forest reserves to further depletion.

Meanwhile, the rationale behind trading gold for oil, according to the Vice President, Dr Mahamudu Bawumia, is meant to tackle dwindling foreign currency reserves, which are weakening the cedi.

If implemented as planned for the first quarter of 2023, the new policy "will fundamentally change our balance of payments and significantly reduce the persistent depreciation of our currency," Bawumia said.

Adamant about the government’s intention to resolve the depreciation of the local currency, Mr Thompson described the barter trade as unfortunate and called on the government to rescind its decision.

He said, “the sad situation about this is that Ghana has an oil refinery that has been abandoned since 2017.”

For him, buying oil with gold is not the best option to strengthen the local currency.

Source: The Independent Ghana