Ghana: BoG considers transferring Gold4Oil implementation to commercial banks

The Bank of Ghana (BoG) has contemplated delegating the implementation of the Gold for Oil Policy to commercial banks. After two years of executing the initiative, the Central Bank aims to reevaluate the model, shifting its focus to core functions like monetary policy and price stability maintenance.

Dr. Ernest Addison, the Central Bank Governor, emphasizes that the policy continues to be a strategic tool for enhancing the country’s reserves. Handing over the implementation to commercial banks is seen as a move that aligns with long-term benefits, contributing positively to Ghana’s economic stability and overall development.

“It is a programme that we recommend to continue because it helped us in the period of crisis. We only want to make sure that this is done by a commercial bank so that we can have time to focus on our operations as a central bank. So this is the discussion that we are holding going forward but the ability to be able to exchange our natural resource directly for oil when oil prices get out of hand, we think that it is a very innovative programme.”

“So it is really about the central bank spreading itself too thin by trying to add gold for oil also into our business but we are fully focused on buying gold to build our reserves”, the Governor said to the Public Accounts Committee in Parliament.

He also reaffirmed its support for the government’s Gold4Oil policy, asserting its importance for the nation despite its limitations.

Dr. Addison emphasized the positive outcomes of the Gold4Oil policy since its introduction in 2022, citing a notable decrease in oil prices compared to those recorded in the same year.

He proposed that the government could maintain reliance on the policy in the event of oil price hikes at fuel pumps, advocating against any potential discontinuation of the initiative.