Scrapping Gold for Oil policy will put pressure on the local currency – Former BOST MD warns

Former Managing Director of the Bulk Oil Storage and Transportation (BOST) Company, Dr. Edwin Provencal, has kicked against the scrapping of the Gold for Oil policy introduced by the past New Patriotic Party (NPP) government.

According to him, although introduced as a temporary measure, the policy played a key role in addressing supply-side inflation and the depreciation of the cedi.

He is of the view that scrapping the policy will put pressure on the local currency.

“At every point in time we brought in oil, we made sure that we brought in the product at a very good price for the people of Ghana. But oil prices are volatile and change on a minute-by-minute basis. It’s possible that at the time of purchase, our price was the best, but global market shifts could later make it seem less competitive.

“I think that the G4O initially was a temporary measure to address a particular problem in this country, which was supply-side inflation. It has played its role big time. Should it be scrapped? I will tell you no. If you scrap it and your fundamentals are weak, you will still have pressure on your forex,” Dr. Edwin Provencal said in an interview with Starr FM.

The former BOST MD welcomed any decision by the new National Democratic Congress (NDC) government to review the Gold for Oil policy.

He proposed that the new government should look at areas in the programme that can be improved to ensure Ghanaians benefit.

“Should it be reviewed? Why not? Like any institution, we can look at the whole value chain and identify areas that can be enhanced.

“Ghanaians have voted for a particular government, and it is up to them to analyze the program and decide whether to enhance it for the good of the people. If it’s going to benefit Ghanaians, why not?” he argued.