International Desk: The government of Ghana, a poor country in West Africa, is working on a plan to buy fuel with gold instead of US dollars to solve the crisis. Last Thursday (November 24), the country’s vice president, Mahamudu Bawumia, announced the plan in a post on Facebook.
According to a report by Al-Jazeera, the global economy is in recession. Demand for the dollar, used as an international exchange currency, has also increased. Especially in countries that have to import fuel, dollar reserves are constantly decreasing. Added to this is high inflation. In such a situation, Ghana announced the plan to buy oil with gold to overcome the dollar crisis.
According to the Government of Ghana, the country had $9.7 billion in reserves at the end of 2021. As of last September, the total foreign exchange reserves were down to about $6.6 billion. With these dollars in hand, the country will be able to pay their import expenses for three months. In such a situation, Ghana is planning to pay the price of imported fuel with gold from the beginning of 2023.
Vice President Mahamudu Bawumia said, ‘The new policy taken by the government will change our exchange system. This will reduce the continuous devaluation of the domestic currency.
He further said that if oil is imported with gold, the currency exchange rate will not directly affect the fuel bill. Because, domestic sellers will not need foreign currency to import oil or oil products. Importing oil with gold will bring about structural changes in the exchange system.
Incidentally, there are oil mines in Ghana. The country produces crude oil. But cannot refine to use. Ghana has been in this problem since 2017. That year, a major explosion shut down an oil refinery in the country. It was the country’s only fuel oil refinery.
