Vice President Dr Mahamudu Bawumia has been explaining why Ghana is currently pursuing an IMF bailout and how to change the status quo.
The gold for oil deal which is “out of the box” thinking according to the Vice President, is one that could perform the magic.
His comment follows a successful delivery of the test shipment of the deal on Monday.
Speaking at the University of Ghana’s Annual New Year School Conference, Dr. Bawumia explained how the administration intends to shore up its reserve and change the status quo.
“Why don’t we rather reach an agreement to exchange our gold for oil and then sell the oil in cedis. Then, use the cedis to buy more gold, use that gold to pay for oil, and sell the oil in cedis and then you don’t need to look for the scarce foreign exchange to buy oil, which always leads to a depreciation in the currency,” he explained.
Dr. Bawumia said the country needs to do something out of the box, particularly, something that “the textbooks don’t teach you.”
According to the Vice President, this approach to resuscitate the economy was well received by the suppliers of oil. He said they’re happy to receive gold as a form of payment.
Meanwhile, on Monday, the country received its first supply of oil through the Gold for Oil deal. Dr Bawumia said the consignment is a test of the viability of the deal.
He added that the fruitfulness of the deal is set in stone and that it would help the country to save foreign exchange and reduce the pressure on the cedi.