Ghana’s newly appointed central bank governor, Dr. Johnson Asiama, has suspended the country’s Gold-for-Oil program, signaling a major change in the nation’s approach to foreign exchange and fuel import management.
The move comes as the Bank of Ghana (BoG) seeks to stabilize the cedi and tighten fiscal discipline under President John Mahama’s administration.
Introduced by the previous administration, the Gold-for-Oil program allowed Ghana to barter its gold reserves for petroleum products instead of using US dollars. The initiative was designed to reduce pressure on forex reserves, curb currency volatility, and secure a stable supply of fuel. However, financial losses incurred under the program prompted Governor Asiama to put it on hold.
The governor in an interview with Bloomberg said the suspension of Gold-for-Oil aligns with BoG’s broader strategy to stabilize the cedi, which lost 19% of its value against the US dollar in 2024. Governor Asiama expressed optimism that better monetary and fiscal policy coordination would help anchor exchange rate stability.
“We intend to maintain an appropriate monetary policy stance,” Asiama stated, highlighting that tight monetary measures and fiscal discipline under President Mahama’s administration would be critical in sustaining foreign exchange stability.
With interest rates at 27% and inflation easing to 23.5% in January 2025, BoG aims to further cool price pressures and restore market confidence after Ghana’s 2022 debt default led to an IMF-backed economic recovery program.
Ghana’s oil import bill stood at $4.5 billion in 2024, with the central bank purchasing 65.4 tons of gold for reserves and barter deals. However, as part of the policy shift, BoG may exit direct gold purchases and transfer this function to a newly established Gold Board, which would oversee bullion transactions.
Governor Asiama, sworn in on February 25, 2025, has vowed to stem operational losses at BoG. The central bank recorded a record deficit of GHS 60.9 billion ($3.9 billion) in 2022, largely due to loan write-downs required for Ghana’s IMF bailout qualification.
“I can tell you for sure that for this year, we will not see a loss occurring,” Asiama assured. “We are taking the right measures to control operational costs.”
The suspension of the Gold-for-Oil program raises key questions about Ghana’s long-term fuel import strategy. Experts warn that the government may need to find alternative methods to manage forex reserves and ensure affordable petroleum prices while avoiding excessive pressure on the cedi.
