The Auditor-General has urged the Bank of Ghana (BoG) to formalize its agreement with the Precious Minerals Marketing Company (PMMC) concerning the Gold for Oil (G4O) policy.
In 2022, Vice President Dr. Mahamudu Bawumia introduced the G4O policy to stabilize Ghana’s currency by using gold reserves to purchase oil instead of relying on dollars. The goal was to reduce the cedi’s decline and mitigate rising living costs.
However, the 2023 Auditor-General’s report highlights issues with the policy’s implementation. The BoG faced significant pressure on its foreign currency reserves due to limited access to the Eurobond market, the impacts of the COVID-19 pandemic, the Russia-Ukraine war, and other economic challenges.
To address the currency’s decline, the BoG employed innovative strategies, including the G4O policy. The Central Bank planned to purchase gold from small-scale miners through the PMMC to acquire foreign currency and facilitate gold purchases.
Despite a Memorandum of Understanding (MoU) between the BoG and PMMC, a formal agreement was never finalized. Consequently, the Auditor-General is recommending that the BoG formalize the agreement for gold transactions with the PMMC to ensure proper execution of the G4O policy.
