The Bank of Ghana has revealed that it has capped its allocations for the Gold for Oil programme in full compliance with the recommendations of the International Monetary Fund.

In 2022, the BoG entered into a contract with the Precious Minerals Marketing Company to use part of its resources from the Domestic Gold Purchase programme to provide foreign currency for the importation of petroleum products.

According to the BoG, this move was intended to ensure the availability of fuel, reduce fuel prices at the pumps, and ease pressure on the cedi.

However, two years later, the Auditor General flagged the contract in its 2023 report, noting the absence of a formal agreement between the Bank of Ghana and the Precious Minerals Marketing Company to back the contract.

First Deputy Governor of the Bank of Ghana, Dr. Maxwell Opoku-Afari, explained why the BoG failed to establish an agreement from the commencement of the programme.

"So we used the Gold Purchasing Programme to be able to purchase more gold for ‘Gold for oil’ and had an MOU with PMMC to be able to do that. That happened in the time of the crisis. Then we started the process of having format agreements, which we started discussing with PMMC and all the others involved," he said.

"That is what the auditors picked up to say that the MOU was not sufficient and it has to be moved to a former Gold Purchase Programme because this is a deviation from the Gold Purchase Programme for reserves. So once we have a Gold For Oil as a separate operation, we should have a format agreement for which we put in place the process and that agreement has been signed."

According to him, the Central Bank thought the contract fell under the 'Gold for Reserve' agreement.