The Bank of Ghana (BOG) has disclosed that as of December 31, 2023, the consolidated capitalised cost incurred on the Gold for Oil (G40) operations was GH¢2.43 billion. 

The bank, in its annual financial report for the year 2023, said the carrying amount represented a cash balance worth GH¢520 million, dore gold holdings in the vault worth GH¢410 million, outstanding oil value of stock worth GH¢1.72 billion, and oil proceeds receivable worth GH¢460 million.  

The report disclosed that the gold holding purchases yet to be paid by the central bank for the year 2023 were GHS 680 million.  

The Gold for Oil (G4O) Programme was an initiative of the Government of Ghana to use the existing BOG Domestic Gold Purchase (DGP) programme to provide import finance facilities to support the importation of petroleum products into Ghana. 

The expectation was that a reduction in foreign exchange pressures, a reduction in premiums charged by international oil traders, and efficiency gains from the value chain would translate to lower ex-pump prices in the country.  

In December 2022, the Gold for Oil (G4O) Programme was initiated by the government to address the escalating prices of petroleum products, which surged averagely from GH¢6.90 per litre in January 2022 to GH¢22.8 per litre in December 2022.  

The G4O Programme was therefore to leverage the existing Bank of Ghana DGPP to support the importation of adequate quantities of petroleum products into Ghana at competitive prices.  

According to the BOG, under the G4O programme, dore gold produced and exported by companies with licensed small-scale concessions, including community mines through the PMMC, shall be purchased by the Bank of Ghana.  

The bank said the purchased dore gold used for the payment of petroleum products supplied to Ghana, either with the foreign exchange (FX) proceeds of gold sold or through a gold barter settlement with the petroleum suppliers.  

The DGPP was meeting its objectives of bolstering reserves while supporting relative foreign exchange market stability and the disinflation process.  

According to the report, the bank in its bid to address major auditing concerns about the programme, the bank reviewed all agreements between the bank and all stakeholders who participated in the programme. 

“By obtaining confirmations for outstanding receivables and payables and circularising the Collateral Management company to confirm the outstanding stock value, we determined the stock price using industry prices.” 

“By reconciling the carrying amount of each category of the balances included in the G40 main account and related exposures to ensure they were appropriately valued and allocated. Other related exposures were fully assessed for impairment, and we also tested the occurrence of direct and indirect expenses related to the operations of this programme,” the report said.