June 13, 2024
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Take another look at gold for oil deal ~ Prof Bokpin tells government ahead of IMF review

Economics Professor at the University of Ghana, Godfred Bokpin says there is no proof that the gold-for-oil deal leads to lower prices at the pumps.

According to him, there were well-founded systems and channels to sell gold on the international market hence Ghana’s decision to exchange gold for oil should have been well thought through.

“There is no demonstration of how the gold for oil will lead to lower prices compared to what we have been doing because the point is that there is an established channel to export your gold and get the dollars and use that to buy oil,” he said.

Speaking on Top Story on JoyFM, he explained that when the government decided to create another avenue to purchase oil, there should have been some level of due diligence to certify if indeed that was the best approach.

“You need to demonstrate side-by-side how this will deliver superior outcomes to consumers. With the limited data that we have so far that hasn’t been done and I think that we have to take another look,” he said on Wednesday.

He continued that during the enforcement stages of the gold-for-oil deal, it dried up the banks’ liquidity at the level, stressing the need for review.

Prof Bokpin’s comments come on the back of the May 17, International Monetary Fund (IMF) report which states that the fund will review Ghana’s gold purchase and gold-for-oil programmes and associated risks for the Bank of Ghana (BoG).

Again, in the negotiation stage of the IMF deal, a Memorandum of Understanding (MoU) was signed between the Ministry of Finance and the BoG to eliminate monetary financing of the Central Government.

On the back of this, responding to the question of whether the government can commit to the MoU, he said, since this was one of the indicators linked to securing the next tranche of money, the government will work hard to comply with it.

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