……Vice President, Dr Mahamudu Bawumia Again???

The Vice President of the Republic of Ghana, Dr Mahamudu Bawumia has sought to heap praises on the NPP government for a supposed ingenuity displayed over the ‘Gold-for-Oil’ barter, having Ghana exchange its mined gold for refined fuel products from UAE.

The Vice President who has earned an unenviable title for hackneyed and unworkable ideas and was speaking at the University of Ghana 74^th New Year school, claimed ‘Gold-for-Oil’ is an initiative the textbooks do not teach.

“So how are we going to change this whole way of doing business as far as our natural resources were concerned? Take the case of Gold in Ghana. We have mined Gold for over 200 years. When I looked at the data, I realized that our total reserves of gold in Ghana was just 8.7tons at the end of 2021, one of the top ten largest gold mines in the world. That we had not accumulated enough gold to build our reserves”, Dr Bawumia said.

“We looked at the other side of the balance sheet. We export gold, we import oil. The cost of oil imports is about $3 billion a year. So we asked the simple question, why don’t we, since we have always got pressure on finding US dollars to buy oil? Why don’t we rather reach an agreement to exchange our gold for oil and then sell the oil in cedis and then use the cedis to buy more gold. Use that gold to pay for oil, seIl the oil in cedis then you don’t need foreign exchange to buy oil which always lead to a depreciation in the currency. So with this idea, we said let’s do something that the textbooks don’t teach you. Let’s do something that is out-of-the-box. And this is why we said gold for oil’, he added.

To start with, it is welcome if Vice President, Dr Bawumia finally sees wisdom in the good counsel of the former Vice President, H.E. Kwesi Amissah-Arthur [late], that textbook knowledge does not apply everywhere.

Again, “Barter System” is not an invention of Dr Bawumia as he was trying to have us believe. It is an age old method adopted by ancient people in exchange of their goods and services.

It is also very important to state that the Akufo Addo/Dr Bawumia government cannot demand to be celebrated for a barter trade when it is their ineptitude and reckless management self-inflicted issues that had collapsed the Ghanaian economy, creating real difficulties for people to the extent that some of the victims are contemplating suicide.

The IMF/World Bank joint Debt Sustainability Analysis [DSA] undertaken on Ghana last year had revealed the country’s debt situation had fallen in the junk category, specifically described as default status – unable to redeem its maturing debt obligations, that accompanied by massive downgrading by Credit Rating Agencies – Fitch, S&P and Moody’s, sending a negative signal which investors picked and started repatriating their investments, creating major foreign exchange issues.

When the IMF/World Bank joint DSA report in 2019 starting showing unsustainable levels of borrowing and government was cautioned, Finance Minister, Ken Ofori Atta’s response was that it was smart borrowing and that there was room to borrow more. Here we are!

Regarding the barter and its sustainability which I would return to at a later time, I have heard from reliable sources that the first 40,000 metric tons consignment is more at a premium, not at a discount rate which departs from one of the main reasons for government in seeking this deal - looking for cheaper oil, then also the issue that the 40,000 metric tons is only 13.3% of the 300,000 metric tons required on monthly basis and as well less than the 41,000 metric tons weekly need.

Now, when I watched Vice President, Dr Bawumia at the UG New Year School, as usual waxing lyrical on the “Gold for Oil” barter, it reminded me of some policy matters he spoke about, some of which failed on implementation and others that did not see the light of day.

An instance was when the Vice President, Dr Bawumia on April 2017 spoke at the Good Friday Service of the Lighthouse Chapel International (LCI) at the Independence Square where he announced that the Akufo-Addo-led government was making a policy switch from building bitumen or asphalt roads to concrete roads.

“It [building concrete roads] will be transformational because as for laying concrete, we can all do it in Ghana. You don’t need to get anybody to come and lay concrete for you. Any mason from any village can come and lay the concrete and go on,” Dr Bawumia stated.

He explained that, following the costing, government had realized that 1km of a concrete road will cost $3.8million and will last 40years but that of asphalt will cost $2.8million but will take only 10years, adding “ So $3.8m for 40years and $2.8m for 10years – the economics is very simple.”

After six years in government, there is hardly any sign of the policy switch to concrete roads anywhere, much to the disappointment of Ghanaians and the Charismatic Bishops Conference whose idea that is.

As though that is not enough, on April 4, 2019, Ghanaians again woke up to a fanciful address by the Vice President on behalf of government, announcing an immediate, drastic reduction in the Benchmark Values - against which duties paid by importers at Ghana’s ports are calculated.

Dr Bawumia indicated that the Benchmark or Delivery Values of imports measures had been designed to reduce the menace of smuggling and make the country’s ports more competitive and attractive, saying: “to reduce the incidence of smuggling and enhance revenue, the benchmark or delivery values of imports have been reduced by 50 percent except for vehicles which will be reduced by 30%”.

The reality is that less than two years of the implementation of the policy, the government in a U-turn announced a reversal – an indication of a policy failure.

The crux of the matter is that the Akufo Addo/Bawumia government lacks credibility, believability and the Member of Parliament for Sagnarigu, in the Northern Region, Alhaji A.B.A. Fuseini captures more succinctly, that “anytime President Akufo Addo or Dr Bawumia greets you good morning, you need to look at the position of the sun before you respond”.

Writer: Koku Mawuli Nanegbe