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Ghana's Government Plans To Pay for Imported Oil Products With Gold

Derek Wolfe

Updated: November 29, 2022

ghana oil gold
Editor’s Note:

EDITOR'S NOTE: The Ghana Oil-Gold Trade: Ghana is an oil-producing country, but it also imports petroleum products as a result of a major refinery closure in 2017. Recently, its government has plans to pay for these products, not in dollars but in gold. This makes Ghana yet another country joining the de-dollarization bandwagon. You’re probably wondering why. Ghana’s move is a hedge. It aims “to combat the deterioration of its foreign-exchange reserves,” as the author below explains. This describes the dollar as a kind of negative monetary contaminant; one that causes the value of a basket of currencies to deteriorate. Sadly, the dollar happens to be our domestic currency which, if we were to view it like other countries, is the source of monetary degradation. Hence, the global movement toward de-dollarization.

By Emmanuel Tumanjong

Ghana's government plans to pay for purchases of imported refined oil products in gold, rather than in dollars, in an effort to combat the deterioration of its foreign-exchange reserves.

The new measure, announced over the weekend by Vice President Mahamudu Bawumia, will begin in the first quarter of next year.

"If we implement it as planned, it will fundamentally change our balance of payments and significantly reduce the persistent depreciation of our currency and the associated increases in fuel, electricity, water, transportation and other products," Mr. Bawumia said.

At the end of September 2022, Ghana's foreign-exchange reserves stood at around $6.6 billion, a level that covers less than three months of imports. At the end of 2021, these reserves were in the order of $9.7 billion, according to data from the country's government.

Ghana, which produces crude oil, has been importing all of its refined petroleum product requirements since the closure of its only refinery in 2017 after the explosion of a distilling unit.

Write to Barcelona Editors at [email protected]

Originally published on Market Watch.

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