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G4O: BoG to halt funding of gold purchase, says PMMC boss

The policy introduced in November 2022, is to allow the government to pay for imported oil products with gold, in a direct barter with gold purchased by the central bank

The Bank of Ghana (BoG) is expected to soon halt funding for the purchase of gold under the “gold for oil” scheme, the MD of the Precious Minerals Marketing Company (PMMC), Nana Kwasi Awuah, has said.

The development forms part of a review of the programme by the government barely a year after it was introduced.

The scheme introduced in November 2022, is to allow the government to pay for imported oil products with gold, in a direct barter with gold purchased by the central bank.

The move is an intervention to help stabilise prices of fuel products, as well as reduce pressure on Ghana’s foreign exchange, as the direct gold barter will be the mode of paying for imported oil instead of depleting the foreign exchange reserve.

Nana Kwasi Awuah (Second from left)
Nana Kwasi Awuah (Second from left)

“The only thing which has changed here is that, the BoG will no longer be funding the programme. This time around it will be third parties,” Awuah said while contributing to a panel discussion at the 4th edition of the Ghana Mining Expo in Takoradi.

“Along the way, the IMF came on board and it also became necessary for the bank and that reason, government to review the programme and for that reason modifications were done in order to permit third parties who were interested in procuring gold from Ghana to come in and then lodge their funds with the Bank of Ghana,” Awuah said.

“The BoG  converts the fund into cedis to enable them [their parties] purchase the gold for export. So, currently as we speak that modification is in force,” he said.

“We are gradually on boarding third parties to be able to participate in the gold for oil programme without losing the very essence of why the programme was initiated in the first place.”

Listen to Nana Kwasi Awuah in the attached audio clip below:

 

 

Reporting by Fred Dzakpata in Takoradi

 

 

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