Adnan Adams Mohammed
The ‘Gold for Oil’ policy has faced critical scrutiny by stakeholders challenging the government’s white wash claims that the policy as implemented has been a success.
Newest to add his voice to the critics is an Energy Strategist who is advising government to take a second look at the ‘Gold for Oil’ Programme as it has not impacted on prices of petroleum products at the pumps.
Last week, some Oil Marketing Companies withdrew from the programme due to unresolved concerns. The government’s gold for oil policy as a government strategy was borne out of the country becoming strapped of foreign exchange. The policy is to enable the government directly exchange gold for oil while avoiding to use foreign currency, particularly the dollar, as a means to control the country’s inflation. The Strategist, who believes the intended purpose of the policy has not been achieved, wants a review of the programme.
“The problem is that it’s not being able to stabilise the cedi that we want to stabilise. At best maybe it has minimised the depreciation rate and that’s not what we wanted”, Dr Yussif Sulemana pointed out to the managers of the economy.
“It’s quite unfortunate and the champions of the programme will have to relook at it and look at the successes and weigh against what we are trading on”.
He quizzed “Are we ready to disturb these institutions [OMCs] just to stabilise the cedi that we are not able to have a firm handle on?”
“At this point in time and in that case, I think the programme needs to be reviewed and if it cannot be reviewed, then we have to just advise ourselves”, he added.
Also, some Civil Society Organisations (CSOs) in the energy sector have challenged government to publish the names of third-party dealers involved in the ‘Gold for Oil’ programme.
The call comes after some Oil Marketing Companies pulled out of the programme due to unresolved concerns.
The Ghana Chamber of Bulk Oil Distributors has announced that some of its members are also unhappy with concerns raised on the implementation of the programme.
Energy Analyst, and Co-Chair of the Ghana Extractive Industries Transparency Initiative, Dr Steve Manteaw said the government must publish the names of all intermediary dealers in the programme to promote transparency.
He added that the current mode of the programme creates room for some operators to take advantage of the system.
“There is no disclosure in terms of who is financing the domestic gold purchasing in this transaction. We are going to resort to the services of a third party. For instance, who is selling Ghana’s gold? if it’s a broker then the broker services have to be disclosed”.
Dr Manteaw stated lack of transparency will encourage corrupt acts that may defeat the purpose of the programme.
“I think it’s fair to ask questions. How much is the broker being paid and how does it affect what we receive as a country in terms of reserves”, he quizzed.
In recent publication, a key player in the extractive industry, the Chairman of Ghana Chamber of Bulk Oil Distributors, Dr. Patrick Kwaku Ofori, says the government’s gold for oil policy has cornered bulk oil distributors working in the country.
Noting that, none of the BDCs had anticipated such a policy as it places them in a tight spot in competition against the government.
Dr. Ofori, speaking in an interview indicated that, the policy will have a toll on the regulators’ revenue generation, “because none of the BDCs or those BDCs who have paid their license fee did not necessarily pay for a license fee to be cornered a percentage of the matter.”
“They want to be given the right climate to conduct their business. And also don’t forget these private entities also employ Ghanaians and they also pay their taxes.
“So it’s a bit of a tricky situation there, and the programme obviously impacted on private sector participation judging from how private sector can also assess the proceeds of the revenue coming from the gold purchases.”
He however suggested that government could change their policy to allow private sector engagement.
“But if government intends to change their policy with regards to the gold for oil and allow private sector participation and say that ‘well as a country, all our revenue that we’re going to generate from maybe gold export, we’re going to use maybe a percentage of it to finance our refined product importation .
“And by so doing, either through the Central Bank reactivating the forex option so that both the private sector and the public entities who are interested in importing refined products can go through those competitive processes to be able to have the product.’”
He also stated that another option was for the Bank of Ghana to surrender all gold proceeds and revenue in a way to guarantee forex availability to the commercial banks for all importers to have access to them.
