There's no transparency in Ghana's gold for oil agreement — Mahama

According to him, the deal is currently shrouded in complete secrecy with only government officials who are involved in the transaction knowing the details, describing the development as unacceptable.

Speaking at a forum attended by members of the UK & Ireland Chapter of the National Democratic Congress (NDC), Mahama cited the Sinohydro agreement that exchanges the country's bauxite for infrastructure development by China as a classic example of batter trade.

He explained that if the Sinohydro agreement was a batter deal and went to Parliament for approval because it is an international financial transaction, why not the current deal in which Ghana's gold is being exchanged for oil?

He urged the government to put before parliament, the Gold for Oil agreement for scrutiny and approval since the deal is an international financial transaction.

He said: "according to the 1992 Constitution of Ghana international financial transactions require the approval of Parliament...it does not matter that the Gold for Oil deal is a batter trade."

"There is a complete lack of transparency about the transaction, and that is one of the major problems with this government. They hide everything and do as they please," he added.

The policy to buy oil products with gold rather than U.S. dollar reserves is meant to tackle dwindling foreign currency reserves coupled with the demand for dollars by oil importers, which weakens the Ghana cedi and increases living costs.

Vice President Dr. Mahamudu Bawumia said the government is projecting to save about US$3 billion in foreign exchange yearly from the proposed policy which seeks to acquire oil products in exchange for gold.

He explained that the policy which would be implemented in the first quarter of next year could also relieve some inflationary pressure on the cedi.

Speaking at the 11th Association of Ghana Industries (AGI) Ghana Industry and Quality Awards in Accra, Bawumia said "So we will be saving US$3 billion from the lack of demand from the Bank of Ghana (BoG) for foreign exchange. This reduces the pressure on the cedi immediately and, therefore, you will see much, much lower depreciation of the currency."

He indicated that the import-reliant nature of the economy, particularly for finished petroleum products, accelerated the depreciation of the cedi and increased the cost of doing business and cost of living.