Emirates National Oil Co. has denied claims by top government official that the company is in talks about supplying Ghana with fuel in return for gold.
“This is totally baseless and incorrect,” an ENOC person said to Bloomberg on Tuesday. “There have been no discussions regarding this subject.”
Ghana’s government reached a “tentative” agreement with the Dubai-based oil firm, Kabiru Mahama, an economic adviser to Vice President Mahamudu Bawumia, said on Friday.
Ghana, Africa’s second-largest gold producer, last week ordered large mining companies to sell 20% of the metal they refine to the central bank from Jan. 1. It’s trying to build up reserves of bullion to be used to import fuel and reduce demand for dollars after a currency plunge of 57% this year.
“We’re open to any international oil-trading company that is interested,” Mahama said in a phone interview. “Starting next October, all our oil-product needs would be swapped for gold.”
In a related development, Dr. Bawumia at the 2022 AGI Awards in Accra, noted that Ghana’s gold-for-oil programme will give Ghana the space to accumulate more international reserves as the country will save the $3 billion it spends on oil imports.
He further stated that the use of gold was specifically for oil imports in the face of declining foreign exchange reserves.
Vice President Bawumia noted that a major source of Cedi depreciation has been the demand for forex to finance imports of oil products and to address this challenge, government is negotiating a new policy regime where sustainable mined gold will be used to buy oil products.
“If we implement the gold-for-oil policy as it is envisioned, it will fundamentally change our balance of payments and significantly reduce the persistent depreciation of our currency with its associated increases in fuel, electricity, water, transport and food prices.”