May 30, 2023

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Ghana plans to pay for fuel purchases in gold bars

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Ghana plans to pay for fuel in gold bars, according to an announcement by Ghana’s Vice President, Mahmud Bawumia. The government’s stated objective: to reduce the depreciation of the national currency, the cedi, and to protect the country’s foreign exchange reserves.

To take this step, major mining companies operating in Ghana will have been ordered to sell 20% of their gold holdings to the central bank from January 1.

Since the closure of the Tema refinery in 2017, Ghana has been producing crude oil for more than a decade and imports almost all of the country’s refined petroleum products.

The result: its foreign exchange reserves continue to dwindle. Last year it was 9.7 billion dollars. Today it is only 6.6 billion.

Covid and the war in Ukraine have crippled the country’s economy. Ghana is heavily in debt. The government is struggling to restore public finances while inflation hovers at over 40%.

A deep crisis that is absolutely necessary for the government to control. Especially since the beginning of the month, Ghanaians have taken to the streets against the high cost of living and rising fuel prices.

►Read More: Ghana is also caught in the spiral of inflation

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