Ghana Takes Steps to Operationalize Gold-for-Oil Scheme — Move Expected to Help Halt Cedi’s Depreciation – Featured Bitcoin News


In response to directives issued by Samuel A. Jinapor, the Ghanaian minister for lands and pure sources, large-scale gold mining corporations can be required to “promote 20% of all refined gold at their refineries to the Financial institution of Ghana.” A gold-for-oil scheme is a part of the Ghanaian authorities’s plan to cease the additional dwindling of the nation’s overseas trade reserves.

Financial institution of Ghana to Use Cedi to Pay for Gold

Following the revelation that Ghana plans to purchase oil merchandise utilizing gold, Samuel A. Jinapor, the nation’s minister for lands and pure sources, introduced on Nov. 25 that beginning in 2023, large-scale mining corporations “shall promote twenty per cent (20%) of all refined gold at their refineries to the Financial institution of Ghana.” Funds for the gold can be made utilizing the native forex — the cedi — and can be “at spot worth with no reductions.”

In response to a Fb post shared by Ghanaian vice chairman Mahamudu Bawumia, the Financial institution of Ghana (BOG) and the Treasured Minerals Advertising Firm (PMMC), will work with the mining corporations to make sure their compliance with the directive. Regarding Ghana’s so-called group mining schemes (CMS), the federal government mentioned these can be required to promote their “gold outputs to authorities by way of PMMC.”

To make sure compliance, Jinapor stipulated that “mining licenses for CMS shall embody a clause mandating licensees to promote their gold output to authorities.” In response to the directives issued by Jinapor, all licensed small-scale gold miners can be subjected to circumstances which can be much like these imposed on group mining schemes.

Ghana’s Dwindling Overseas Alternate Reserves

In the meantime, in an earlier put up that exposed Ghana’s gold-for-oil plan, Vice President Bawumia insisted such a choice would assist protect the nation’s depleting overseas trade reserves. He added:

The barter of sustainably mined gold for oil is without doubt one of the most vital financial coverage modifications in Ghana since independence. If we implement it as envisioned, it’ll basically change our stability of funds and considerably scale back the persistent depreciation of our forex with its related will increase in gas, electrical energy, water, transport, and meals costs.

By decreasing or eliminating using U.S. {dollars} when importing oil merchandise, Ghana will successfully sort out one of many key elements behind the cedi’s fast depreciation, Bawumia argued. As reported by Bitcoin.com Information, the Ghanaian forex’s fast decline because the begin of 2022 has seen it being named the world’s worst-performing forex.

Whereas Jinapor’s directives to gold mining corporations are being framed as a channel that helps “native gold refineries receive gold provides from PMMC to assist their operations,” a few of Bawumia’s followers on the social media platform have criticized the proposed gold-for-oil coverage.

Reacting to the Ghanaian vice chairman’s put up, Fb consumer Naji Alhassan mentioned: “These should not good measures. These are window-dressing to please the bourgeois class. One of the simplest ways to go is to personal at the least 50% of our gold and likewise a gold refinery to refine our gold. Very quickly, the bourgeois class will deplete all of the gold that the Financial institution of Ghana can be shopping for. We would like pragmatic measures.”

Nonetheless, a few of Bawumia’s followers, like Mohammed Hashiru, applauded the transfer which they claimed would cease “imperialists from utilizing their nugatory papers to regulate, manipulate and destroy our economies.”

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Terence Zimwara

Terence Zimwara is a Zimbabwe award-winning journalist, creator and author. He has written extensively in regards to the financial troubles of some African international locations in addition to how digital currencies can present Africans with an escape route.

Picture Credit: Shutterstock, Pixabay, Wiki Commons

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