Accra, Oct 4, GNA, Bright Simons, Vice President of IMANI Africa, has criticised Ghana‘s controversial Gold-for-Oil programme, highlighting how its conception and execution departed from sound economic principles and resulted in financial losses for the state.
Mr. Simons explained that the policy was designed to stabilise the Cedi and reduce pressure on Ghana’s foreign reserves, but instead created inefficiencies warranting scrutiny and potential prosecution.
He noted that Ghana’s fuel consumption has been rising sharply over the years, yet weak industrial policy has prevented domestic refining. Despite having two major refineries, neither operates at full capacity, forcing Ghana to spend between $250 million and $400 million monthly importing refined fuel.
According to Mr. Simons, this dependency prompted the government in 2021 and 2022 to propose the Gold-for-Oil scheme as an innovative alternative. The plan sought to use domestically purchased gold, paid for in Cedis, to acquire oil directly, bypassing the dollar and easing pressure on the local currency.
“The logic was that since we mine gold locally and can buy it in Cedis, we could use the gold to acquire oil without demanding dollars. The expectation was that this would moderate pressure on the currency,” he explained.
However, Mr. Simons argued that the model was economically unsound unless it produced a better rate than selling gold for dollars and then buying oil, a condition that was never demonstrated.
“The barter model would only make sense if you could show that trading gold directly for oil gives you a more favourable rate than selling gold for dollars and using those dollars to buy oil. That was never demonstrated,” he said.
He further highlighted that poor oversight, lack of transparency, and flawed implementation compounded inefficiencies and caused material losses to the state.
“The programme’s structure and execution created conditions for losses that could have been avoided. These are material losses to the state that deserve investigation,” he stressed.
