Former Presidential staffer under the erstwhile John Dramani Mahama administration, PV Dadson Boateng Jantuah has rubbished the government’s move to buy oil products with gold rather than U.S. dollar reserves.
The policy as explained by government officials is to tackle dwindling foreign currency reserves coupled with demand for dollars by oil importers, which is weakening the local cedi and increasing living costs.
Mr. Jantuah has described the policy if implemented as infantile as it will be difficult and cumbersome owing to the geopolitics of the moment.
MyNewsGh.com monitored his position on Kumasi-based Ultimate 106.9 FM.
“They are not looking at geopolitics, you want to use gold for oil this infantile policy, how is it going to work. If you want to manage your economy well you must understand and keep yourself abreast with geopolitics”
“Do you think the Russia-Ukraine war just happened, no. so we are in the hands of people who are inept, who are corrupt, who are incompetent, who are padding heads, they have nothing to offer” he said.
“If implemented as planned for the first quarter of 2023, the new policy will fundamentally change our balance of payments and significantly reduce the persistent depreciation of our currency”, Vice President Dr. Mahamudu Bawumia is reported to have said.
PV Jantuah however believes that is not feasible.
“You are saying you are going to use our gold for oil, our storage as we have now is about 8 tones or so when you convert it to monetary terms it will be say 500 million dollars . You need over 400 million to import oil every month, so how feasible is this infantile policy gold for oil”, he asked.
“We are even in crises, if we have the gold where is the BoG going to raise the money to buy the gold? The next thing for them to do is to go and print money and they will escalate inflation too, so what are they talking about. We are in real dire crises”, he stressed.
Ghana’s government is working on a new policy to buy oil products with gold rather than U.S. dollar reserves, Vice-President Mahamudu Bawumia said on Facebook on Thursday.
The proposed policy is uncommon. While countries sometimes trade oil for other goods or commodities, such deals typically involve an oil-producing nation receiving non-oil goods rather than the opposite.
Ghana produces crude oil but it has depend on imports for refined oil products since its only refinery shut down after an explosion in 2017