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Thursday, February 2, 2023

Ghana plans to pay for fuel purchases in gold bars

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Ghana plans to pay in gold bars for its fuel purchases, according to the announcement of the Ghanaian vice-president, Mahamudu Bawumia. The stated objective of the government: to reduce the depreciation of the national currency, the cedi, and to preserve the country’s foreign exchange reserves.

To be able to carry out this operation, the large mining companies operating in Ghana would have received the order to sell 20% of their stock of gold to the Central Bank from next January 1st.

Since the closure of the Tema refinery in 2017, Ghana, which has been producing crude oil for more than ten years, imports all the refined petroleum products the country needs.

Result: its foreign exchange reserves continue to decline. They were at $9.7 billion last year. Only 6.6 billion today.

Covid and the war in Ukraine have crippled the country’s economy. Ghana is in huge debt. The government is struggling to resuscitate public finances, while inflation is over 40%.

A deep crisis that it is absolutely necessary to curb for the government. Especially since at the beginning of the month, Ghanaians took to the streets to protest against the high cost of living and soaring fuel prices.

►To re-read: Ghana too entangled in the inflationary spiral

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