- Ghana’s authorities is planning to use gold to pay out for oil alternatively of shelling out US bucks.
- The move is envisioned to lower the “persistent depreciation” of the cedi, the Ghanaian currency.
- As of end-September, Ghana’s foreign exchange reserves ended up just ample to address 3 months value of imports.
Ghana’s govt is setting up to go again to a barter process of trade.
In purchase to shield the country’s rapidly-dwindling overseas forex reserves, Ghana needs to spend for oil with gold in its place of shelling out precious US dollars, Mahamudu Bawumia, the country’s vice president claimed Thursday.
Ghana’s gross intercontinental reserves have fallen by about one particular-3rd — from $9.7 billion at the close of 2021 to all over $6.6 billion at the close of September 2022, according to official facts.
The reserves will cover just 2.9 months of the country’s goods and services imports — limited of the government’s goal of masking 3-and-a-50 %-months worthy of of imports for 2022, according to a duplicate of the country’s spending budget speech sent by finance minister Ken Ofori-Atta on Thursday.
The Ghanaian federal government is seeking to employ the “new coverage routine” of making use of gold to get oil products in the initial quarter of 2023, in purchase to counter inflation due to the depreciation of the cedi, Ghana’s forex. The cedi has fallen in opposition to the US dollars for the reason that there is powerful need for the buck from oil importers, Bawumia defined in a Facebook submit on Thursday.
By not applying the US dollar in the country’s oil trade, the move is envisioned to decrease the “persistent depreciation” of the cedi, since sellers of gasoline in the nation will no longer have to consider the greenback-cedi trade rate into account when pricing their products, he added.
Ghana’s gold-for-oil plan is abnormal mainly because it by itself is an oil developing nation. Even so, it nevertheless has to import refined oil items this sort of as fuel and diesel, since Ghana’s only oil refinery has been offline next an explosion in 2017, for every Reuters.
It truly is even far more uncommon, as barter promotions normally include an oil-developing state investing for non-oil products.
But Ghana — which also generates gold — is mired in a debt disaster and is negotiating a reduction package with the Global Monetary Fund.
Finance minister Ofori-Atta claimed in his Thursday speech the nation is “in significant possibility of credit card debt distress” as the cedi’s depreciation was “seriously influencing” its skill to take care of its community financial debt. The cedi has dropped much more than 50 percent its worth from the US dollar so considerably this yr.
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- Ghana’s authorities is planning to use gold to pay out for oil alternatively of shelling out US bucks.
- The move is envisioned to lower the “persistent depreciation” of the cedi, the Ghanaian currency.
- As of end-September, Ghana’s foreign exchange reserves ended up just ample to address 3 months value of imports.
Ghana’s govt is setting up to go again to a barter process of trade.
In purchase to shield the country’s rapidly-dwindling overseas forex reserves, Ghana needs to spend for oil with gold in its place of shelling out precious US dollars, Mahamudu Bawumia, the country’s vice president claimed Thursday.
Ghana’s gross intercontinental reserves have fallen by about one particular-3rd — from $9.7 billion at the close of 2021 to all over $6.6 billion at the close of September 2022, according to official facts.
The reserves will cover just 2.9 months of the country’s goods and services imports — limited of the government’s goal of masking 3-and-a-50 %-months worthy of of imports for 2022, according to a duplicate of the country’s spending budget speech sent by finance minister Ken Ofori-Atta on Thursday.
The Ghanaian federal government is seeking to employ the “new coverage routine” of making use of gold to get oil products in the initial quarter of 2023, in purchase to counter inflation due to the depreciation of the cedi, Ghana’s forex. The cedi has fallen in opposition to the US dollars for the reason that there is powerful need for the buck from oil importers, Bawumia defined in a Facebook submit on Thursday.
By not applying the US dollar in the country’s oil trade, the move is envisioned to decrease the “persistent depreciation” of the cedi, since sellers of gasoline in the nation will no longer have to consider the greenback-cedi trade rate into account when pricing their products, he added.
Ghana’s gold-for-oil plan is abnormal mainly because it by itself is an oil developing nation. Even so, it nevertheless has to import refined oil items this sort of as fuel and diesel, since Ghana’s only oil refinery has been offline next an explosion in 2017, for every Reuters.
It truly is even far more uncommon, as barter promotions normally include an oil-developing state investing for non-oil products.
But Ghana — which also generates gold — is mired in a debt disaster and is negotiating a reduction package with the Global Monetary Fund.
Finance minister Ofori-Atta claimed in his Thursday speech the nation is “in significant possibility of credit card debt distress” as the cedi’s depreciation was “seriously influencing” its skill to take care of its community financial debt. The cedi has dropped much more than 50 percent its worth from the US dollar so considerably this yr.
