Ghanaian Vice President Mahmudu Bavumia announced Tuesday that the government is developing a new policy to buy petroleum products with gold instead of US dollar reserves to combat inflation and the energy crisis. According to Bavumia, Ghana’s dwindling foreign exchange reserves and increased demand for dollars from importers of petroleum products have led to a fall in the value of the currency and a rise in the cost of living, prompting the government to consider tapping its gold reserves. Ghanaian foreign exchange reserves fell from about $9.7bn at the end of December to about $6.6bn at the end of September, according to official data, covering less than three months of imports. If the “gold for oil” policy is implemented in the first quarter of next year, “it will fundamentally change our balance of payments and significantly slow the continued depreciation of our currency,” Mr. Bavumia said. Using gold reserves to buy petroleum products means domestic importers no longer need to apply for foreign currency to import petroleum products, he explained, preventing currency fluctuations from directly affecting the prices of domestic fuel and utilities such as transportation, water and electricity. It would be one of the most significant shifts in Ghana’s economic policy since independence in 1957. Some oil-producing countries sometimes swap oil for other commodities, while swapping gold or other commodities for oil is less common, Reuters said. Ghana, located in west Africa, is one of the world’s leading gold producers. It also produces oil, but has had to rely on imports for refining oil since its only refinery was shut down by an explosion in 2017. On the same day, Ghana’s finance minister, Ken Ofori-Atta, presented the 2023 budget to parliament, which calls for the government to cut back on its spiralling debt burden. He warned that Ghana was at high risk of a debt crisis and that the devaluation of the Serdi was seriously affecting the country’s ability to manage its public debt. (End) (Hu Ruoyu) Tags/Keywords: Mahamudu Bawumia