Governor of the Bank of Ghana (BoG), Dr. Ernest Addison, has defended his stance on the continuation of the ‘Gold for Oil initiative’, citing the volatile nature of market sentiments as a key factor necessitating its persistence.
During his appearance at the Public Accounts Committee of Parliament on Monday, April 8, responding to queries from Buem Member of Parliament, Mr. Kofi Adams, Dr. Addison emphasized the importance of maintaining the program to avoid being caught off guard by unforeseen market fluctuations.
Dr Addison said “It is a programme that we recommend to continue because it helped us in the period of crisis.
“We only want to make sure that this is done by a commercial bank so that we can have time to focus on our operations as a central bank.
“So this is the discussion that we are holding going forward but the ability to be able to exchange our natural resource directly for oil when oil prices get out of hand, we think that it is a very innovative porgramme.
“So it is really about the central bank spreading itself too thin by trying to add gold for oil also into our business but we are fully focused on buying gold to build our reserves.”
Mr Adams asked again: “Do you think there is any commercial bank capacitated enough to do this if you are to shift?”
Dr Addison replied to him “I said this is an intervention that is very critical in the heat of the crisis. Yes the foreign exchange market is functioning better than in 2022. Oil prices have come down much better than they were in 2022 so the situation is much better now than it was in 2022 when the Gold for Oil was indicated.
“However, we think it is still an important programme for the government to have that option and to be able to empower a commercial bank to undertake the activity.
“Market sentiments change every day, we don’t know what will happen tomorrow, we will wake up, and then if we find ourselves in a situation where prices driving the pump prices where they were again, the government has the option to follow so it is a very important innovative instrument.”