Former Chief Executive Officer (CEO) of the Ghana National Petroleum Commission (GNPC), Alex Mould is concerned that some persons in government are using the gold for oil deal as a means to enrich themselves.
The government took delivery of 40,000 metric tons of the first consignment of the gold for oil deal on January 15 with the expectation of reducing the pressure on forex and also presenting the country with cheaper fuel.
According to him, the deal is only a ploy by key players that control government to take a share of the gold and petroleum industries.
“Thus these beneficial players, soon to be identified are taking market share in both gold exports and petroleum products imports under the guise of government policy using government institutions and even the regulators of these sectors,” he added.
He finds it important that the bidding process be open and transparent.
“Is the oil import programme under this G4O deal going to be a long-term contract with only one International Oil-Trading Company (IOTC), or will there be bidding for each cargo? On this first G4O cargo contract, did it go through a public procurement bidding process? Was it open and transparent?”
“Who represents LITASCO in Ghana? And, who is the beneficial representative?” he quizzed.
He is also concerned that the Bank of Ghana is the most “exposed government institution in this G4O deal.”
“The importer on record, BOST, who is directly exposed to the credit risk of the BDCs, does not give cover to BoG via the provision of a bank letter of credit/guarantee.”
“In this G4O BoG then uses the foreign exchange obtained from the sale of gold (which would normally then flow into the banking system in Ghana) to pay for the petroleum products imports. BoG is taking the direct risk exposure to buy the oil on behalf of BOST who then takes delivery of the oil and then sells to GoENERGY (and, maybe, some other BDCs) who should then provide some financial guarantee to BOST to cover credit and operational risk.”
“While all the underlying transactions may be legal, certain government players and advisors are using their influence to direct government policy as well as government institutions including the Regulator, to muscle out existing players in order to enrich themselves,” he added.
