Ghanaian News

PMMC boss: Gold for oil policy will sanitise trading in gold

The Precious Minerals Marketing Company (PMMC) is optimistic that the gold for oil scheme introduced by the government will help sanitise and build the confidence of Ghanaians in gold trading.

The MD of PMMC Nana Akwasi Awuah said gold smuggling could be one of the major threats to the newly introduced policy.

“I know that in times past, there have been some issues about some private entities that have attempted to use gold to trade in this country, the popular Menzgold is a reminder of that and so Ghanaians are quite skeptical about investing in gold,” Awuah told Asaase News.

“But we believe that once we are able to sanitise the sector and we are able to build confidence and trust, we should be able to encourage more Ghanaians to come forward and trade in the commodity,” he said.

The deal
In November 2022 the Government of Ghana, through the vice-president, announced plans to buy oil products with gold rather than US dollars.

Vice-President Mahamudu Bawumia said the gold for oil policy was meant to tackle dwindling foreign currency reserves coupled with demand for dollars by oil importers, which was weakening the cedi and increasing the cost of living.

“It will fundamentally change our balance of payments and significantly reduce the persistent depreciation of our currency,” Bawumia said.

He added that using gold would prevent the exchange rate from having a direct impact on fuel or utility prices, as domestic sellers would no longer need foreign exchange to import oil products.

First consignment
The first consignment of oil under the government’s gold for oil policy has arrived at Tema Port and being discharged into receptacles of the Bulk Oil Storage and Transportation Company (BOST).

The 41,000 metric tonnes of petroleum products, delivered by the vessel SCF YENISEI, will be sold by BOST to bulk distributing companies (BDCs) around Ghana.

Valued at US$40 million, the deal was brokered by the economic management team, led by Vice-President Bawumia.

“Mining offices”
The Precious Minerals Marketing Company (PMMC) has also signalled its readiness to establish offices in selected mining regions to enhance the trading of gold as the implementation of the gold for oil policy gains momentum.

Under the implementation, all gold from small-scale mining companies shall be sold to the government through the PMMC.

A statement issued by the company on Monday (16 January) said: “To implement the directives, PMMC shall establish offices in selected mining regions, the first of which has already been set up in Kumasi, in the Ashanti Region.

“All existing gold trading and export licence holders (‘implementing partners’) shall continue their usual business activities except that the gold so purchased by them from the small-scale sector shall not be exported. The gold purchased by the implementing partners shall be sold to PMMC,” the statement said.

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