Bank of Ghana Ends Gold for Oil After GH¢2.1 Billion in Losses
The Bank of Ghana (BoG) has officially terminated its Gold for Oil (G4O) programme after incurring significant financial losses over a two-year period. According to its financial statements, the Bank lost GH¢317 million in 2023 and a much larger GH¢1.82 billion in 2024, bringing total losses to GH¢2.137 billion.Between 2023 and early 2025, the central bank invested approximately GH¢4.69 billion into the initiative. With nearly 45% of this amount lost, BoG announced on March 13, 2025, that the programme had been discontinued due to its unsustainable financial toll.
Background: Why G4O Was Introduced
The Gold for Oil initiative was introduced in December 2022 as Ghana faced soaring fuel prices and a rapidly depreciating cedi. In November 2022, diesel prices had reached GH¢23 per litre, and petrol stood at GH¢17 per litre at GOIL stations. Simultaneously, Ghana’s foreign reserves were being depleted, creating a critical shortage of U.S. dollars needed to import petroleum products.
Ghana typically spends about $400 million monthly on fuel imports. This demand for dollars heavily strained the country’s foreign exchange reserves and put further pressure on the local currency. In response, the BoG proposed using Ghana’s gold reserves—rather than U.S. dollars—to pay for imported fuel, hoping to ease the pressure on the cedi and reduce the demand for dollars.
How the Programme Worked
The foundation for G4O had been laid earlier. In June 2021, the BoG began a domestic gold purchasing programme through the Precious Minerals Marketing Company (PMMC), now rebranded as GoldBOD. This effort aimed to bolster Ghana’s gold reserves by purchasing gold dore from local miners in cedis, refining it abroad, and using it to support the country’s reserves.
This programme significantly increased Ghana’s gold holdings, growing from 8.74 tonnes in 2021 to over 32 tonnes by 2025.
Under the expanded G4O framework, the BoG—through PMMC—continued buying gold locally in cedis. The gold was handed over to brokers who sold it internationally for U.S. dollars. These proceeds were deposited into the BoG’s offshore accounts (known as nostro accounts) and then used to buy petroleum products for importation.
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Although the imported fuel arrived in Ghana, the actual dollars used in the transactions never entered the domestic economy. As a result, while the strategy was meant to ease foreign exchange pressures, it didn’t deliver fresh hard currency to local banks or markets.
Lack of Oversight and Transparency
One of the major criticisms of the G4O programme was the lack of transparency. The initiative did not undergo parliamentary approval, with the government arguing it was a central bank operation, not a government policy requiring legislative oversight.
Furthermore, there has been no public disclosure of the selection process for gold brokers, the number of intermediaries involved, or the commission and fees paid during the gold-to-fuel conversion process. This opacity has raised concerns about governance and accountability.
Mixed Economic Impact
In its early stages, the programme appeared to help. Fuel prices declined, and the cedi showed signs of stability in the months after G4O was rolled out. The central bank credited the initiative with relieving some of the pressure on the local currency by reducing demand for U.S. dollars among oil importers.
By November 2023, the then-Finance Minister, Ken Ofori-Atta, told Parliament that the G4O programme was covering about 30% of Ghana’s petroleum import needs. However, after that announcement, there were few updates—until the release of the BoG’s 2024 financial report, which revealed the full extent of the programme’s losses.
While some improvement in the cedi’s performance may have been attributable to G4O, it coincided with Ghana’s May 2023 deal with the International Monetary Fund (IMF), making it difficult to isolate the programme’s direct impact.
Mounting Losses and Programme Termination
Despite early optimism, the financial losses associated with G4O ultimately became unsustainable. The Bank of Ghana reported that the majority of the GH¢2.1 billion in losses were due to foreign exchange-related challenges. However, many key operational details—such as the exact volumes of gold sold, the amount of fuel procured, and the intermediary costs—remain unknown.
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The programme was unable to achieve long-term currency stability or generate savings. Instead, it left a significant hole in the BoG’s balance sheet. With capital losses exceeding 45%, the central bank concluded that continuing the initiative was no longer viable and ended it in March 2025.
A Costly Experiment
Ghana’s Gold for Oil initiative was an ambitious but risky strategy intended to address acute fuel price spikes and a collapsing local currency by leveraging domestic gold resources. While it may have provided temporary relief in terms of fuel affordability and reduced dollar demand, the programme lacked transparency, parliamentary scrutiny, and operational efficiency.
The resulting GH¢2.137 billion in losses make it one of the costliest interventions in recent economic history. Although Ghana’s gold reserves grew significantly during this period, the financial and institutional costs of G4O have overshadowed its initial promise. Without full disclosure of how the programme operated, its true effectiveness and long-term value remain in question.
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