A USA financial analyst, Scott Bolshevik, has described Ghana’s Vice President, Dr. Mahamudu Bawumia as a kitchen economist.
His criticism comes after the Ghana cedi depreciated by 55% in a matter of two years after Dr. Bawumia, the head of the economic management team proudly introduced the Gold for Oil policy which was supposed to salvage the country’s economy.
The Gold for Oil policy is an initiative launched by the government to address Ghana’s depleting foreign currency reserves and the high demand for dollars by oil importers, which was exerting downward pressure on the Cedi and driving up living costs.
In a post on X, Scott Bolshevik said, “In November 2022, Bawumia proudly introduced the “Gold for Oil” policy, which launched in January 2023, when the exchange rate was 10.6. Now, the rate has climbed to 16.5 that’s 55% depreciation in two years If he’s not a kitchen economist, I’m not sure where he fits.”
The Gold for Oil policy, as explained by the government, is to allow the government to pay for imported oil products with gold, in a direct barter with gold purchased by the Central Bank.
According to the government’s G40 Programme Framework dated February 3, 2023, which explains the policy, payment for the oil supply is done in two channels; barter trade or via forex obtained from selling gold to a broker.
Under the barter channel, suppliers willing to take gold in direct exchange for petroleum products will be provided with the equivalent volume of gold by the Bank of Ghana (BoG).
Under the Broker Channel, the BoG executes a gold supply agreement under which it sells gold to a gold broker, which provides forex cover to pay for petroleum products.
In November 2022, Bawumia proudly introduced the “Gold for Oil” policy, which launched in January 2023, when the exchange rate was 10.6. Now, the rate has climbed to 16.5 that’s 55% depreciation in two years
If he’s not a kitchen economist, I’m not sure where he fits. pic.twitter.com/KswU63jCkO
— Scott (@scottbolshevik) October 27, 2024
