ACCRA, Ghana : Vice-President, Mahamudu Bawumia, said on Facebook that the country's government is drafting a new policy to purchase oil products using gold rather than U.S. dollar reserves due to dwindling foreign currency reserves.
The move is meant to deal with demands for dollars from oil importers, which are weakening Ghana's currency, the cedi, and increasing the cost of living.
The government said at the end of September 2022, the Gross International Reserves of Ghana were $6.6 billion, less than three months of payments for imports and down from $9.7 billion at the end of last year.
If implemented as planned in the first quarter of 2023, the new policy will significantly change our balance of payments and reduce the depreciation of our currency, Bawumia said.
He added that as domestic sellers would no longer need foreign exchange to import oil products, using gold would prevent the exchange rate from directly impacting fuel or utility prices.
Since its only refinery shut down in 2017 after an explosion, Ghana has relied on imports for refined oil products despite being a crude oil producer.
In an effort to deal with a spiraling debt crisis, Ghana's Finance Minister, Ken Ofori-Atta, announced measures to cut spending and boost revenues.
The Ghanian government is negotiating a relief package with the International Monetary Fund as the country is facing its worst economic crisis in a generation.