If not for Gold-for-Oil, our economy would have collapsed - Bawumia

Former Vice President Dr. Mahamudu Bawumia claims Ghana's economy would have collapsed without the Gold-for-Oil and gold purchase programs he initiated.

He spoke during his Thank You Tour in the UK. At an event with the Young Executive Forum (YEF) in London, he emphasized that current economic stability is linked to these bold interventions.

“If we had not instituted the gold purchase program and gold-for-oil program, our economy would have collapsed,” he stated. He questioned where $5 billion would have come from to support the economy.

Dr. Bawumia explained that choosing gold was strategic because it doesn’t require foreign exchange. “You don’t need to export to get gold,” he said. Unlike cocoa or timber, which must be exported for foreign currency, gold can be obtained locally.

In just two years, the Bank of Ghana purchased $5 billion worth of gold. “We were going to the IMF for $3 billion and facing many challenges,” he noted.

He compared NPP’s achievements with those of the NDC administration. “They haven’t increased reserves by even one ton,” he remarked.

After all the election noise, people are noticing our reserves, which grew to 30 tons. When NPP took office, Ghana had only 8.7 tons of gold reserves, unchanged for 65 years after independence.

“In just two years, we went to 30 tons,” he added. This increase provides significant backing for the currency.

Dr. Bawumia dismissed claims that recent cedi appreciation is due to NDC policies. He challenged them to identify any specific policy responsible for this change.

“They only passed their budget in March and haven’t issued contracts or made payments,” he explained. Therefore, they cannot claim credit for currency improvements.

He also mentioned other factors affecting currency value, such as a weakening US dollar and reduced government spending domestically.

“For example, Zambia’s Kwacha has gained ground due to a declining US dollar,” he said.

The government is not paying Independent Power Producers (IPPs), leading to severe power shortages (dumsor). They are also not paying contractors; less spending reduces pressure on the currency.

Dr. Bawumia concluded that groundwork laid by his administration could help maintain cedi stability depending on how the current government manages economic affairs moving forward.