The International Monetary Fund’s (IMF) 2023 report highlights forthcoming amendments to the BoG Act that will introduce stricter limits for monetary financing, mechanisms for monitoring and enforcing compliance, and a clear definition of emergency situations that may temporarily lift the limit.
While awaiting legislative changes, the BoG and the Finance Ministry have signed a Memorandum of Understanding (MoU) to eliminate monetary financing during the program.
An ongoing Safeguards Assessment will provide additional support for designing changes to the BoG Act, particularly concerning the government’s gold purchase and gold-for-oil programs and the risks they pose to the BoG.
The debt restructuring will impact the BoG’s balance sheet, and plans for recapitalization with support from the IMF’s technical assistance will be developed following an assessment of the impact.
The Bank of Ghana has expressed its intention to conduct a comprehensive analysis of the risks associated with its involvement in the government’s Gold-for-Oil program and report its findings to the IMF Executive Board.
Additionally, the central bank plans to gradually exit the Gold For Oil program as the economy stabilizes.
According to the government, the Gold-for-Oil program was introduced as a temporary measure to ensure sufficient fuel supplies at favorable prices.
To ensure transparency and mitigate fiscal risks, the government commits to transparent contractual volumes and pricing structures for commodity export/import, clear adherence to the applicable legal framework, regular performance audits conducted by the Auditor General, adherence to best international practices and central bank safeguards standards for gold purchases by the Bank of Ghana, and alignment of the gold-for-oil framework with IMF Article VIII.
The Government of Ghana has implemented the Gold for Oil (G4O) Programme, which utilizes the Bank of Ghana’s (BoG) Domestic Gold Purchase (DGP) Programme to facilitate the importation of petroleum products into the country.
The main aim of this initiative is to utilize the surplus foreign exchange resources generated through the BoG’s DGP programme to secure the necessary foreign currency for importing petroleum products. Currently, the monthly import value of petroleum products amounts to approximately USD 350 million.