The Member of Parliament for the Cape Coast South constituency, Kweku Ricketts-Hagan has described the policy by the government to purchase oil with gold instead of dollar reserves as a very daft idea.

Mr Ricketts-Hagan speaking on the Big Issue on Citi TV/Citi FM on Saturday, December 3, said the decision is a clear indication that the government lacks an understanding of Ghana’s economy.

Ghana’s Vice President, Dr Mahamudu Bawumia announced that the government is working on a new policy to buy oil products with gold rather than U.S. dollar reserves.

The move is meant to tackle dwindling foreign currency reserves coupled with the demand for dollars by oil importers, which is weakening the local cedi and increasing living costs.

Ghana’s Gross International Reserves stood at around $6.6 billion at the end of September 2022, equating to less than three months of imports cover. That is down from around $9.7 billion at the end of last year, according to the government.

But Mr Ricketts-Hagan said the policy has not been properly thought through by the government and would be difficult to implement since the prices of fuel are set by the international market.

“Gold for oil is a daft idea, extremely daft. This government is taking us from the Guggisberg economy to the stone age economy. This is what was done in the stone age,” Mr Ricketts-Hagan told host Selorm Adonoo.

He added that “the managers of the economy do not understand the modern day economy they are managing. The world has changed from when you can take tomatoes for onions… The price [of oil] is decided in the international market.”

The proposed policy by the government is uncommon. While countries sometimes trade oil for other goods or commodities, such deals typically involve an oil-producing nation receiving non-oil goods rather than the opposite.

Ghana produces crude oil but it has relied on imports for refined oil products since its only refinery shut down in 2017.