Gold for Oil: BoG spends GH¢2.43bn on Petroleum Finance

The Bank of Ghana (BOG) has disclosed that as of December 31, 2023, the consolidated capitalised cost incurred on the Gold for Oil (G40) operations was GH¢2.43 billion.

According to the report, the carrying amount of the G4O programme stood at GH¢2.43 billion, comprising a cash balance of GH¢520 million, dore gold holdings in the vault worth GH¢410 million, outstanding oil value of stock worth GH¢1.72 billion, and oil proceeds receivable worth GH¢460 million.

The G4O programme was an initiative launched by the Government of Ghana in December 2022 to address the escalating prices of petroleum products.

The programme aimed to reduce foreign exchange pressures, premiums charged by international oil traders, and efficiency gains from the value chain to translate to lower ex-pump prices in the country.

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The BOG’s report highlights that as of December 2023, the bank’s outstanding gold holding purchases yet to be paid were GHS 680 million. The bank has also reviewed all agreements with stakeholders who participated in the programme to address major auditing concerns.

“We determined the stock price using industry prices.

By reconciling the carrying amount of each category of the balances included in the G4O main account and related exposures to ensure they were appropriately valued and allocated,” said the report. “Other related exposures were fully assessed for impairment, and we also tested the occurrence of direct and indirect expenses related to the operations of this programme.”

The BOG’s Domestic Gold Purchase (DGP) programme was leveraged to support the importation of adequate quantities of petroleum products into Ghana at competitive prices. Under the G4O programme, dore gold produced and exported by companies with licensed small-scale concessions, including community mines through the Precious Minerals Marketing Company (PMMC), were purchased by the Bank of Ghana.

The purchased dore gold was used for the payment of petroleum products supplied to Ghana, either with foreign exchange (FX) proceeds of gold sold or through a gold barter settlement with petroleum suppliers. The DGP programme has been meeting its objectives of bolstering reserves while supporting relative foreign exchange market stability and the disinflation process.

The BOG’s annual financial report provides valuable insights into the performance and operations of the G4O programme, highlighting its efforts to address major auditing concerns and ensure transparency in its financial reporting.

credit; GNA

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