Audio By Carbonatix
Ghana will likely hedge its oil imports under a new risk management strategy to keep fiscal consolidation on track as global crude prices recover, a finance ministry source told Reuters on Monday.
Brent crude futures hit $71 a barrel last week before easing to $69.88 on Monday, but prices were still on track for their strongest start to the year in five years.
The West African country has largely been a net crude importer, except last year when oil exports exceeded imports by around $990 million, according to central bank data.
While future price recovery was partially good news for Ghana’s oil exports, the government fears it could also derail price stability and spike fuel-related expenditures.
The major commodity exporter operates a deregulated consumer fuel pricing mechanism after the government reluctantly scrapped subsidies in 2015 under a deal with the International Monetary Fund (IMF).
“It’s a challenge and we are working on a comprehensive oil risk management strategy to ensure we remain on track ... Buying some call options is most likely,” the source said, suggesting plans to hedge using futures contracts.
The holder of a call option has the discretion to assume a long position in crude futures at the strike price. Contracts are available for trading at derivative markets such as the New York Mercantile Exchange.
After cumulatively easing its benchmark policy rate by 550 basis points last year, the central bank last week held the rate at 20 percent, citing emerging inflation pressures as global prices recover.
Ghana, which also exports cocoa and gold, is in its final year of a $918 million credit deal with the IMF to reduce budget deficit, public debt, inflation and stabilize its volatile local currency.
Latest Stories
-
‘Beating Ghana did not surprise me’ – Gambia boss
25 minutes -
OpenAI agents get rebrand – as ‘dots’ – while safety worries delay new model
31 minutes -
US ban on Canadian alcohol and dairy takes effect as trade war drags on
44 minutes -
Baffour Awuah’s EOCO case reopens Equity Savings & Loans file as SIC recovery battle emerges
44 minutes -
Ghana ranked 5th source of cocaine seized at Antwerp, Belgium in 2025
45 minutes -
‘We knew there was disruption’ – Gambia boss claims Ghana players clashed at half-time
46 minutes -
Bagbin adjourns Parliament indefinitely
1 hour -
African Most Beautiful USA Queen to host Community Zumba Dance session in Accra
1 hour -
Cocaine probe: Speaker got it wrong by blocking parliamentary inquiry – Minority Leader
2 hours -
FoSCel foundation calls for end to stigma and stereotyping against people living with sickle cell disease
2 hours -
Auditor-General to track audit recommendations as GH¢280.5m in surcharges remains unpaid
2 hours -
Walewale MP withdraws ‘rude’ comment on Bagbin’s Parliament recall, apologises
2 hours -
FoSCel founder urges curriculum reform to strengthen sickle cell education in Ghana
2 hours -
United States launches America.Gov for public services 5 years after Dr. Bawumia launched Ghana’s version Ghana.Gov
2 hours -
Cocaine probe: Majority used super majority with Speaker’s support to weaken Parliament – Afenyo-Markin
2 hours