Dr. Edwin Alfred Nii Obodai Provencal, a former managing director of the Bulk Oil Storage and Transportation Company Limited (BOST), has called the new Bank of Ghana (BoG) leadership’s decision to halt the Gold for Oil Program premature.
He contends that Ghana’s Gold-for-Oil program was a daring and avant-garde policy experiment that garnered international notice for its effort to use a traditional asset (gold) to address contemporary economic issues.
He clarified that the program had a noticeable effect on the Ghanaian economy during the two years it was in operation.
According to him, it helped bring the price and supply of fuel under control during a crisis, helped bring inflation down from all-time highs, and supported the cedi and foreign reserves during times of severe strain.
The country’s Gold-for-Oil program has been suspended, according to Dr. Johnson Asiama, Governor of the Bank of Ghana (BoG), because of unidentified operational and policy issues.
However, Dr. Provencal responded to this development in a Facebook post by saying “The data show that during the G4O period, inflation dropped sharply (from 54% to the 20s), the exchange rate steadied, and the current account even moved into surplus – outcomes that aligned with the program’s objectives, though clearly aided by other policy interventions and external factors.”
Below is his full post…
I believe the suspension of G4O is premature.
Ghana’s Gold-for-Oil program has been a bold and innovative policy experiment, one that attracted global attention for its attempt to leverage a traditional asset (gold) to solve modern economic problems.
Over the two years of its operation, G4O has had a tangible impact on the Ghanaian economy: it helped stabilize fuel supply and prices during a period of crisis, contributed to easing inflation from historical highs, and provided support to the cedi and foreign reserves when they were under extreme pressure.
The data show that during the G4O period, inflation dropped sharply (from 54% to the 20s), the exchange rate steadied, and the current account even moved into surplus – outcomes that aligned with the program’s objectives, though clearly aided by other policy interventions and external factors.
