Ghana plans to buy oil products with gold rather than US dollar reserves in a measure aimed at stemming the weakening of its currency, the cedi, and to address the increasing living costs.
According to the government the country’s foreign reserves stood at around $6.6bn (£5.4bn) at the end of September 2022 down from $9.7bn at the end of last year. This equates to to less than three months of imports cover.
“Using gold would prevent the exchange rate from directly impacting fuel or utility prices as domestic sellers would no longer need foreign exchange to import oil products,” said Mr Bawumia.
“The barter of gold for oil represents a major structural change,” he added.
The proposed policy due to be launched early next year is uncommon, Reuters reports.
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.
Despite being an oil producer Ghana relies on imports because its only refinery shut down after an explosion in 2017.
The government of President Nana Akufo-Addo is under intense political pressure and is currently negotiating a relief package with the IMF.
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