Dr. Mahamudu Bawumia
Former Vice President and flagbearer of the opposition New Patriotic Party (NPP), Dr. Mahamudu Bawumia, has said the Gold-for-Oil programme, which was designed under the Akufo-Addo administration, helped Ghana avert a potentially severe fuel crisis at a time when the country was grappling with acute foreign exchange shortages.
He explained that the policy was introduced as an emergency measure to enable the nation to secure petroleum products without relying entirely on scarce US dollars at the height of the economic crisis that followed the COVID-19 pandemic and the Russia-Ukraine war.
Dr. Bawumia said the nation’s inability to access international capital markets at the time had created severe pressure on her balance of payments and significantly constrained the availability of foreign exchange for essential economic activities.
He made the disclosure when he engaged the Ghana National Association of Small-Scale Miners on Thursday, August 27, 2026, as part of consultations aimed at identifying practical reforms to address challenges confronting the mining sector.
Recalling the economic circumstances that led to the policy, Dr. Bawumia said the nation had previously relied heavily on international capital markets to raise foreign currency to support its economic activities.
“You know, before then we would normally go to the capital markets, raise $3 billion and then go on in terms of our economic management,” he said.
According to him, the situation changed dramatically following the COVID-19 pandemic and the Russia-Ukraine war, which disrupted global markets and contributed to emerging market economies, including Ghana, losing access to international capital markets.
“But suddenly that gap was shut for quite a few countries. And for us it resulted in a balance of payments crisis,” he said.
Dr. Bawumia said the foreign exchange difficulties were compounded by restrictions under the nation’s International Monetary Fund (IMF) programme on the amount of foreign exchange the Bank of Ghana could use to intervene in the foreign exchange market.
He said the central bank was limited to a maximum of $80 million a month for such interventions, an amount he described as inadequate compared with the monthly foreign exchange demand in the country.
“And you can imagine what the demand for foreign exchange for Ghana would be on a monthly basis, significantly more than $80 million a month,” he said.
The former Vice President said the mismatch between foreign exchange demand and supply consequently placed enormous pressure on the cedi, leading to rapid depreciation and heightened concerns about the country’s ability to meet its import obligations.
“We were really constricted in terms of availability of foreign exchange. And at the same time the cedi was depreciating almost on a daily basis,” he stated.
He said the circumstances compelled policymakers to consider alternative mechanisms for meeting critical import requirements without depending solely on conventional foreign exchange transactions.
Dr. Bawumia said developments in Sri Lanka, where severe foreign exchange shortages contributed to fuel shortages, heightened his concerns about the possibility of Ghana experiencing a similar situation.
“In Sri Lanka, people were out on the streets, they were facing similar foreign exchange constraints and there was shortage of fuel because you couldn’t pay,” he said.
“They didn’t have the foreign exchange to pay for fuel,” he added.
It was against this background, he said, that the idea of exchanging the nation’s gold directly for petroleum products was conceived.
“And so why don’t we come up with the idea of gold for oil to start with, to exchange our gold for oil so that we get out of this foreign exchange construct,” Dr. Bawumia said.
He argued that the arrangement provided a way for the country to secure fuel while reducing pressure on its limited dollar reserves.
“This is the background of the gold for oil programme which essentially saved us from a bigger crisis,” he said.
Dr. Bawumia said without the programme, Ghana could have encountered serious difficulties in paying for petroleum imports, potentially resulting in major fuel shortages.
“Because if we had not been able to pay for the oil, then we would have had major fuel shortages and so on,” he pointed out.
He said the success of the arrangement, however, depended on Ghana having sufficient gold to support the barter system.
“So that was a measure that was introduced. Of course we had to buy the gold, isn’t it?” he said.
Dr. Bawumia disclosed that this also informed efforts to increase attention to the gold resources and strengthen domestic gold purchases.
He stressed that Ghana’s position as Africa’s leading gold producer gave the country an important resource that could be leveraged to address foreign exchange challenges during periods of economic stress.
“When you look at Ghana, we are Africa’s number one gold producer,” he said, adding that Ghana was also among the world’s leading gold producers.
For Dr. Bawumia, the Gold-for-Oil initiative therefore represented an attempt to use one of the country’s key natural resources to address an immediate economic vulnerability and protect the supply of an essential commodity.
By Ernest Kofi Adu