Ghana’s new central bank governor has suspended the country’s program of using gold to pay for oil and expressed confidence that the cedi will stabilize following last year’s volatility.
- Ghana’s new central bank governor has suspended the gold-for-oil program.
- Bank of Ghana governor aims to stabilize the cedi and maintain appropriate monetary policy stance.
- Interest rates are at 27% and inflation has eased to 23.5% in January.
Ghana’s new central bank governor has suspended the country’s program of using gold to pay for oil and expressed confidence that the cedi will stabilize following last year’s volatility.
According to Bank of Ghana Governor Johnson Asiama, “We intend to maintain an appropriate monetary policy stance.” Along with commitments to fiscal discipline under President John Mahama’s administration, this “should help us maintain stability in the foreign exchange markets,” he said.
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With interest rates at 27% and inflation easing to 23.5% in January, Asiama stated that improved coordination between monetary and fiscal policies should help reduce price pressures as Ghana moves past the economic turmoil of its 2022 debt default.
The previous government, which Mahama decisively defeated in the December elections, introduced the gold-for-oil program to counter currency fluctuations. Under the scheme, the central bank bought gold using local currency and then used it for bartering or purchasing oil.
“We have had to incur some losses on that,” Asiama, who completed his doctorate in economics from the University of Southampton, told Bloomberg Television’s Ondiro Oganga without giving details. “So we’ve put some suspension” on the trade, he said.
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Ghana’s oil import bill reached $4.5 billion in 2024. By September, the Bank of Ghana had acquired 65.4 tons of gold for its foreign reserves and the barter program, with reserves totalling 30.5 tons by the end of the year.
The central bank may withdraw from purchasing bullion and transfer the responsibility to a soon-to-be-established Gold Board, he stated.
Asiama, whom Mahama swore into office on Feb. 25, has pledged to curb losses at the central bank after it recorded a record spending overrun of 60.9 billion cedis ($3.9 billion) in 2022, driven by loan write-downs required to secure an International Monetary Fund bailout.
