![\"\"](\"http:\/\/www.ghanamma.com\/wp-content\/uploads\/2022\/10\/image-60-696x464.png\" "\\"Akufo-Addo\\"\/")
<\/div>\nGhana is in talks with\u00a0Emirates National Oil Company\u00a0for a barter arrangement that will enable the West African nation to buy fuel with gold.<\/p>\n
The government reached a \u201ctentative\u201d agreement with the Dubai-based oil firm, said Kabiru Mahama, an economic adviser to Vice President Dr Mahamudu Bawumia.<\/p>\n
Ghana, Africa\u2019s second-largest gold producer, last week\u00a0ordered\u00a0large mining companies to sell 20% of the metal they refine to the central bank from January 1 as it builds up reserves of bullion to be used to import fuel and reduce demand for dollars after its currency plunged 57% this year.<\/p>\n
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\u201cWe\u2019re open to any international oil-trading company that is interested,\u201d Mr Mahama said in a phone interview on Friday.<\/p>\n
\u201cStarting next October, all our oil-product needs would be swapped for gold.\u201d<\/p>\n
Ghana is struggling to stabilize its economy and sees the barter system as a way to stem a slide in the cedi \u2014 the world\u2019s worst performer among currencies tracked by Bloomberg.<\/p>\n
The weakening cedi is fueling inflation and depleting the nation\u2019s foreign-exchange reserves.<\/p>\n
Meanwhile, President Nana Akufo-Addo\u2019s government, which lost access to international capital markets this year because of ballooning debt and loan-service costs, plans to ask international bondholders to accept losses on their investments to pave the way for an International Monetary Fund bailout.<\/p>\n
ENOC didn\u2019t immediately respond to an email and a phone message requesting comment. Dubai\u2019s government, which owns ENOC, also didn\u2019t immediately respond to an email seeking comment.<\/p>\n
Government-to-Government<\/h3>\n
Dubai has a long association with the gold trade. While critics say that regulatory loopholes allow bullion used for money laundering and smuggled out of war zones to be traded in the city, Dubai\u2019s commodities exchange has\u00a0rejected\u00a0those claims.<\/p>\n
Gold trading was brought into the United Arab Emirates\u2019s federally managed anti-money laundering reporting system last year.<\/p>\n
\u201cENOC is interested in giving us refined oil for gold,\u201d Steve Opata, head of financial markets at the Bank of Ghana, said in an interview on Monday.<\/p>\n
\u201cDepending on what quantities they are committed to giving us, we will give them the equivalent in gold. This is a government-to-government program.\u201d<\/p>\n
Ghana spends about $10 billion annually on imports, of which 48% is spent on purchasing fuel.<\/p>\n
The government expects bartering gold for refined crude will help it rebuild gross international reserves that fell to $6.7 billion at the end of October, enough to cover just 2.9 months of imports, from $10.8 billion a year earlier.<\/p>\n
The plunging currency resulted in inflation accelerating to 40.4% in October. That prompted the central bank to raise borrowing costs by 250 basis points to 27%, the\u00a0highest level\u00a0in more than 19 years.\u00a0<\/p>\n
The\u00a0Bank of Ghana\u00a0will buy the gold from mining companies in cedis. Ghana began buying gold last year \u2014 the first time in 60 years \u2014 to bolster its foreign reserves. The latest move ramps up the purchases.<\/p>\n
\u201cIf we implement it as envisioned, it will fundamentally change our balance of payments,\u201d Bawumia said in a Facebook post.<\/p>\n
Oil importers\u2019 demand for dollars \u201cin the face of dwindling foreign-exchange reserves results in the depreciation of the cedi and increases in the cost of living with higher prices for fuel, transportation and utilities,\u201d he said.<\/p>\n
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