Ghana has officially suspended its Gold-for-Oil (G4O) program, a policy launched in 2022 aimed at reducing the country’s dependence on foreign currency for fuel imports and stabilizing domestic fuel prices.
The decision was announced by the new Governor of the Bank of Ghana (BoG), Dr. Johnson Asiama, citing operational challenges and financial setbacks as key reasons for the suspension. Dr. Asiama, emphasized that while the program had ambitious objectives, its execution faced significant hurdles that resulted in financial losses. Despite this, he remains optimistic about Ghana’s economic trajectory, highlighting the importance of prudent fiscal management and disciplined monetary policies to ensure economic stability.
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Gold-for-Oil programme
The Gold-for-Oil initiative was initially designed to mitigate foreign exchange shortages and exchange rate fluctuations, which were major contributors to rising fuel costs. By securing oil supplies in exchange for gold, the program sought to ease pressure on the local currency, the Ghanaian cedi.
Analysts pointed out that recent reductions in fuel prices were more likely influenced by global market trends rather than the direct impact of the G4O policy. Additionally, concerns were raised about the government’s intervention in a largely deregulated fuel market, which some viewed as disruptive to private sector operations.
Following the suspension, the BoG has announced plans to transfer responsibility for gold purchases to a newly established Gold Board, which will oversee the country’s gold reserves and ensure a more structured and transparent approach to gold trading.
The suspension marks a shift in Ghana’s economic policy direction, with the government prioritizing fiscal discipline, tax reforms, and revenue generation from key sectors like mining. Moving forward, the focus will be on stabilizing the foreign exchange market and fostering long-term economic resilience.
