Ghana’s Gold-for-Oil (G4O) programme, an initiative designed to stabilize the Cedi and alleviate pressure on the nation’s foreign exchange reserves, has become the subject of intense scrutiny following allegations of substantial financial leakages and deeply flawed implementation. This critical national discussion unfolded prominently on JoyNews’ Newsfile programme on Saturday, October 4.

Bright Simons, Vice President of IMANI Africa, has emerged as a leading critic, meticulously detailing how the programme’s execution veered away from its core economic rationale. He elaborated that the initiative, conceived in 2021 and 2022, aimed to leverage domestically purchased gold, paid for in Cedis, to procure fuel directly, thereby circumventing the need for U.S. dollars. The fundamental premise was that this approach would moderate pressure on the local currency by reducing demand for dollars for oil imports. However, Mr. Simons contended that this direct barter model was never economically justified, as it failed to demonstrate superior returns compared to simply selling gold for dollars and subsequently purchasing oil with those dollars.

An IMANI Africa report highlights a significant GH¢7.2 billion leakage within the Gold-for-Oil programme, leading Mr. Simons to assert that the primary beneficiaries were not the Ghanaian populace as intended, but rather a select cohort of brokers and middlemen. He emphasized that these intermediaries exploited the monetization process for private gain and argued that Ghana could have achieved its stated objectives through a far more transparent mechanism. Such a mechanism, he suggested, could involve selling Cedi-purchased gold on the international market for dollars and then auctioning those dollars to Bulk Distribution Companies (BDCs). Furthermore, Mr. Simons linked the programme’s systemic issues to Ghana's weak industrial base and underperforming oil refineries, which currently prevent the country from refining its own crude oil and necessitate monthly refined fuel imports costing between $250 million and $400 million. He called for a thorough investigation and potential prosecution to address the substantial material losses incurred by the state due to what he described as flawed implementation, inadequate oversight, and a pervasive lack of transparency.

Conversely, Kwadwo Poku, Executive Director of the Institute for Energy Policy and Research and a member of the New Patriotic Party's (NPP) Communication Team, staunchly defended the integrity of the government’s Gold-for-Oil programme. Speaking on the same Newsfile programme, Mr. Poku firmly stated that all companies participating in the initiative underwent rigorous due diligence processes. He affirmed that state institutions, including the Bank of Ghana, which conducted Know Your Customer (KYC) procedures, and the Financial Intelligence Centre (FIC), actively screened and verified the credentials of all firms involved in the programme.

The contrasting perspectives presented by Bright Simons and Kwadwo Poku underscore the ongoing controversy surrounding the Gold-for-Oil initiative. While proponents emphasize robust due diligence and the program's intended benefits, critics point to significant financial losses and a perceived lack of transparency, urging immediate accountability for the alleged GH¢7.2 billion leakage and a comprehensive reassessment of Ghana's economic policies concerning fuel importation and domestic refining capacity.