Business

How Ghana lost over GH¢2bn swapping gold for fuel

Published

2 months ago

June 9, 2025

Since its rollout in January 2023, the Bank of Ghana has disclosed that it incurred losses of GH¢317 million in 2023 and GH¢1.82 billion in 2024 under the Gold for Oil (G4O) programme.

That brings total losses to GH¢2.137 billion over two years.

The central bank injected GH¢4.69 billion into the programme, effectively losing 45% of the capital it deployed in an effort to stabilise fuel prices and support the cedi.

On March 13, 2025, the Bank officially ended the Gold for Oil initiative, citing the heavy financial losses sustained as the primary reason for shutting it down.

Gold for Oil (G4O) was introduced in December 2022 in response to surging fuel prices, with diesel retailing as high as GH¢23 per litre and petrol around GH¢17 at GOIL stations in November 2022.

A sharp cedi depreciation and the rapid depletion of foreign reserves forced the government and the Bank of Ghana to try an alternative strategy: use gold, not dollars, to purchase petroleum products from the international market.

The logic behind the programme was straightforward. Ghana needed a workaround to its dollar shortage that wouldn’t further drain the Bank of Ghana’s reserves or worsen currency depreciation.

The goal was to ease pressure on the cedi by preserving scarce foreign exchange reserves.

Ghana spends about $400 million each month importing fuel, making it a major driver of dollar demand.

Reducing that pressure, even partially, was central to the programme’s logic.

The Bank had already launched a domestic gold purchase programme in June 2021, partnering with the then Precious Minerals Marketing Company (PMMC), now rebranded as GoldBOD, to buy gold dore from local miners in cedis and refine it abroad for Ghana’s official reserves.

The aim at the time was to double Ghana’s gold reserves within five years, then standing at 8.74 tonnes.

That gold stockpile now exceeds 32 tonnes, nearly quadrupling in under four years, according to central bank data.

The domestic gold purchase programme was later expanded to include the Gold for Oil framework

The Bank, via PMMC, bought dore in cedis from miners, handed it to a “gold broker”, and had it sold internationally.

The broker sold the gold for U.S. dollars and deposited the proceeds directly into the Bank’s offshore (nostro) accounts. These funds were used to purchase petroleum products.

The fuel was delivered to Ghana, but the dollars used to buy it remained overseas. As a result, the local economy saw no direct injection of foreign currency.

Notably, the entire arrangement was never subjected to parliamentary oversight. The ruling government argued at the time that the Gold for Oil programme was not an executive policy but a central bank initiative, and therefore did not require parliamentary approval.

The criteria for selecting these gold brokers, the fees paid, and the number of intermediaries involved have not been publicly disclosed.

The cedi did stabilise in the months after G4O’s launch, and fuel prices fell.

While it’s hard to isolate the programme’s direct impact from that of the IMF deal signed in May 2023, the reduced dollar demand from oil importers likely contributed to easing exchange rate pressure.

By November 2023 (nine months in) then-Finance Minister Ken Ofori-Atta told Parliament during the 2024 budget presentation that G4O accounted for around 30% of petroleum imports.

No major updates followed until the release of the Bank’s 2024 financial report.

The Bank attributes most of the GH¢2.1 billion loss to foreign exchange losses.

But key details remain missing: the volume of gold acquired, the fuel supplied, the commissions paid, the intermediaries involved, and the broader impact of the programme.

With over GH₵2.1 billion in reported losses and little transparency about how it was run, Gold for Oil has ended as a costly intervention.

It may have brought temporary foreign exchange relief and cheaper fuel, but it ultimately left a deep hole in the Bank of Ghana’s books.

myjoyonline.com

Business

Inflation For June 2025 Slows Significantly To 13.7%

Published

3 weeks ago

July 2, 2025

AladdynKing

The year-on- year Inflation for the month of June 2025 has slowed significantly to 13.7 percent from the 18.4 percent posted in May 2025.

This is sixth consecutive decline in inflation for this year and the lowest since December 2021.

According to the data released by the Ghana Statistical Service in Accra today, July 2, 2025, the decline, was influenced by significant slowdown in the general price levels of foodstuffs and items

The Government Statistician, Dr. Alhassan Iddrisu noted that the development shows that the pressures driving inflation over the past months are declining.

For the first time in a while, the general price levels from May to June this year dropped, recording what a deflation of 1.2 percent.

According to the Ghana Statistical Service the move could mean that Ghanaians paid less for goods and services for the month of June 2025 compared to May 2025.

Dr. Iddrisu, said “the downward inflationary trend over the last 6 months provides some consistency and assurance of real sustained shift in prices.”

The Upper West region recorded the highest regional inflation of 32.3% largely caused by food inflation and utilities while the Bono region recorded the lowest of 8.4%.

Dr. Iddrisu further called for the use granular data to ascertain the disparity in regional inflation to achieve reduced inflation in the regions.

Food inflation dropped by 6.5 percentage points to 16.3% down from 22.8% in May while non-food inflation dropped by 3 percentage points 11.4%.

myjoyonline.com

Business

BoG Issues Warning To Banks And Public Over 10 Unlicensed Money Transfer Services

Published

4 weeks ago

June 27, 2025

AladdynKing

The Bank of Ghana (BoG) has issued a strong caution to the public, banks, dedicated electronic money issuers (DEMIs), and enhanced payment service providers (EPSPs), urging them not to engage in any transactions with ten money transfer organisations that are operating in the remittance and foreign exchange markets without the necessary regulatory approval.

The entities involved include Ace Money Transfer, Remit Union, Remit Home, Roze Remit, Monty Global, Nairagram, I-Transfer, Hurupay, Eversend, and Izi Send.

“By this notice, all market players are reminded of the above directives and entreated to comply accordingly”, a statement released by the BoG on June 27, 2025, said.

The BoG emphasized that any institution that fails to adhere to this directive will face strict sanctions, which may include the revocation of its operating license.

“Approved money transfer organisations are reminded to terminate their foreign exchange flows through their partner institutions only and to adhere strictly to all the guidelines in respect of their operations”.

The statement further clarified that Section 3.1 of the Foreign Exchange Act, 2006 (Act 723) stipulates: “a person shall not engage in the business of dealing in foreign exchange without a licence issued under this Act”.

It also referenced Section 15.3 of the same Act, which provides that “each transfer of foreign exchange to or from Ghana shall be made through a person licensed to carry out the business of money transfers or any other authorised dealer.”

“The Public, Banks, Dedicated Electronic Money Issuer (DEMI) and Enhanced Payment Service Providers (EPSP) are by this Notice cautioned to desist from dealing with any of these institutions”.

Unapproved-Money-Transfer-Organisation-MTOs-Operating-in-the-Remittance-and-the-Ghana-Forex-Market Download

Business

Electroland Ghana announces further price reductions as cedi strengthens

Published

1 month ago

June 10, 2025

AladdynKing

Electroland Ghana Limited has announced a major price reduction on its goods following the continued appreciation of the cedi against major currencies.

This move, made in line with its “Cedi Apicki Apicki” promotion, comes shortly after a previous price reduction, which was also prompted by the cedi’s strengthening.

Addressing journalists at a press conference on Monday, June 9, the Head of Marketing & Media Relations at Electroland Ghana, Adiza Ibrahim, stated that customers across the country would benefit from a double price reduction on all products.

“We are entreating the general public across Ghana that this additional discount tech prices is for everybody,” she said

She further emphasised that the company has not authorised any third party to request or receive electronic payments, cautioning customers to beware of fraud.

“We have not entrusted any third party to take mobile money payment on behalf of Electroland before their items are supplied to them. I am entreating the general public to be cautious,” she emphasised.

Electroland Ghana Limited is a leading distributor of Midea, TCL, and Nasco electronics in Ghana.

citinewsroom.com