GHANA ANNOUNCES NEW POLICY TO BUY OIL WITH GOLD INSTEAD OF U.S DOLLARS

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On Thursday, Ghana’s Finance Minister Ken Ofori-Arra presented the 2023 budget in parliament and also announced that there will be more spending cuts, including a freeze on government hiring and hike in the Value Added Tax. It also looked into using gold to buy oil rather than U.S dollars as the country’s currency depreciates against the U.S dollars.

 

The new policy to buy oil products with gold rather than U.S dollars will be effective next year as previously announced by the Vice-President Mahamudu Bawumia on facebook, which is part of the government measures to strengthen the Cedi.

 

The Spokesperson of the Vice-President, Gideon Boako explained how the policy works, he said: “It is basically going to be a government-to-government transaction”.

 

He mentioned that the Ghana’s government will buy gold locally with Cedis through the Bank of Ghana (financier) and then exchange the gold for fuel (oil) in a barter form, an example, with the UAE’s government.

 

Daniel Amartey, an economist with the Accra-based Policy Initiative for Economic Development (PIED) described the policy as inventive. He said: “It is a very progressive one and within the shortest possible time it should be able to help address the depreciation of Cedis, requiring less dollars to be used in terms of our exportation”.

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