West African country Ghana plans to purchase oil with gold instead of US dollar.
Ghana’s Vice-President Mahamudu Bawumia said on Facebook on Thursday that the new move is aimed at tackling the dwindling foreign exchange reserves in addition to the demand for dollars by oil importers, which is taking a toll on living costs and weakening the local currency.
Ghana’s gross international reserves were $6.6 billion at the end of September 2022, which equates to less than three months of imports cover. They came down from almost $9.7 billion at the end of last year.
Bawumia said that if the policy is implemented as planned for the first quarter of 2023, it will drastically transform the country’s balance of payments while significantly reducing the continuous depreciation of currency.
The proposed policy is a rare one. While countries sometimes trade oil for other goods, such deals mostly involve an oil-producing nation receiving non-oil goods rather than the opposite.
