Gold for Oil Policy Fails to Stabilize Cedi
—-NPP Leadership at Odds Over Programme’s Objectives
In a stark departure from initial promises, Ghana’s innovative Gold for Oil policy has failed to stem the rapid depreciation of the cedi against major foreign currencies, most notably the US dollar.
This development has not only raised questions about the efficacy of the programme but has also exposed apparent contradictions within the leadership of the ruling New Patriotic Party (NPP) regarding the policy’s intended outcomes.
As the 2024 general elections in Ghana loom, the NPP finds itself embroiled in a controversy over its flagship economic policy, which they claimed to be a game-changer. The policy, championed by Vice President Dr. Mahamudu Bawumia, has failed to deliver on its promise of stabilizing the rapidly depreciating Ghanaian cedi, exposing a rift within the party’s leadership and raising serious questions about its economic stewardship.
Dr. Bawumia, who is now the NPP’s presidential candidate for the upcoming 2024 elections, championed the Gold for Oil policy upon its introduction in late 2022. At the time, Dr. Bawumia confidently asserted that the policy would “ease the pressure on forex” and help stabilize the cedi. His statements created high expectations among Ghanaians, who were grappling with a rapidly depreciating currency and its attendant economic challenges.
However, nearly two years after the policy’s implementation, the economic reality paints a different picture. The cedi-dollar exchange rate has continued its downward spiral, approaching the alarming threshold of 17 cedis to one US dollar. This persistent decline has not only contradicted the Vice President’s earlier assurances but has also sparked a heated debate about the true objectives and effectiveness of the Gold for Oil policy.

Adding fuel to the controversy, Dr. Bawumia’s running mate for the 2024 elections has recently made statements that appear to contradict the Vice President’s initial promises. In a surprising turn of events, Dr. Bawumia’s the running mate, Dr. Matthew Opoku-Prempeh claimed that currency stabilization was never an objective of the Gold for Oil policy, directly contradicting Dr. Bawumia’s earlier statements.
This apparent disconnect between the Vice President’s initial promises and his running mate’s recent claims has left many Ghanaians bewildered and raised serious questions about the NPP’s economic strategy and communication.
Economic analysts have been quick to weigh in on the situation. Dr. Ama Boakye, a senior economist at the University of Ghana, remarked, “The discrepancy between the initial promises and current claims is troubling. It either indicates a lack of clear communication within the NPP leadership or, more worryingly, an attempt to shift goalposts when faced with policy failure.”
The opposition National Democratic Congress (NDC) has seized upon this controversy, with its Communication Officer, Sammy Gyamfi, stating, “This is a clear admission of failure by the NPP government. They promised Ghanaians that this policy would stabilize our currency, and now they’re trying to pretend that was never the goal. It’s a betrayal of the people’s trust.”
The Ghana Chamber of Commerce and Industry has also expressed concern over the policy’s performance. Its president, Clement Osei-Amoako, noted, “The business community was initially optimistic about the Gold for Oil policy. However, the continued depreciation of the cedi has severely impacted our operations. We need clarity from the government on how they intend to address this pressing issue.”
As the controversy unfolds, questions are being raised about the transparency and accountability of the Gold for Oil program. Critics argue that the lack of clear metrics for success and the apparent shifting of objectives make it difficult to assess the policy’s true impact.
Dr. Kwame Asiedu, a policy analyst at the Centre for Socioeconomic Studies, commented, “The government needs to provide a comprehensive review of the Gold for Oil policy. We need to understand how much gold has been traded, how much oil has been received, and what the net benefit to the economy has been. Without this information, it’s impossible to judge whether the policy is achieving anything at all.”
The Ministry of Finance and the Bank of Ghana have remained notably silent on the issue, further fueling speculation and uncertainty.
As Ghana approaches the 2024 elections, this controversy is likely to become a major talking point. The NPP government’s handling of the economy, particularly its innovative but controversial policies like Gold for Oil, will undoubtedly face intense scrutiny from voters.
For now, as the cedi continues its downward trend and conflicting narratives emerge from within the NPP, Ghanaians are left wondering about the true objectives and effectiveness of a policy that was once heralded as a game-changer for the country’s economy. The coming months will be crucial as the government attempts to reconcile its earlier promises with the current economic reality, all while maintaining public trust in its economic management capabilities
The potential implications of the Gold for Oil policy’s apparent failure for the NPP in the upcoming 2024 elections are significant and multifaceted. The discrepancy between the initial promises and current reality could severely damage the NPP’s credibility, as voters may question the party’s ability to deliver on its economic promises, which could extend to skepticism about other campaign pledges. The NPP’s long-standing image as the party of sound economic management could also be undermined, potentially swaying swing voters who prioritize economic competence.
Adding fuel to the controversy, Dr. Bawumia’s running mate for the 2024 elections, Dr. Matthew Opoku-Prempeh, has recently made statements that appear to contradict the Vice President’s initial promises. In a surprising turn of events, Dr. Opoku-Prempeh claimed that currency stabilization was never an objective of the Gold for Oil policy, directly contradicting Dr. Bawumia’s earlier statements. This apparent disconnect between the Vice President’s initial promises and his running mate’s recent claims has left many Ghanaians bewildered and raised serious questions about the NPP’s economic strategy and communication.
The opposition National Democratic Congress (NDC) has seized upon this controversy, using it as ample ammunition to challenge the NPP’s economic management. They could frame this as a prime example of the NPP’s economic mismanagement, creating slogans or catchphrases that encapsulate the policy’s failure. The NDC might also launch a comprehensive “Broken Promises” campaign, with the Gold for Oil policy as the centerpiece, highlighting the disparity between the NPP’s promises and the actual outcomes.
Moreover, the NDC could question Dr. Bawumia’s credibility as an economic expert, using his previous statements about the policy to challenge his understanding of economic matters and his fitness for the presidency. They might also feature testimonials from ordinary Ghanaians about how the continued depreciation of the cedi has affected their lives, businesses, and purchasing power, further undermining the NPP’s economic credentials.
As the controversy unfolds and the cedi continues its downward trend, the NPP government’s handling of the economy, particularly its innovative but controversial policies like Gold for Oil, will undoubtedly face intense scrutiny from voters. The coming months will be crucial as the government attempts to reconcile its earlier promises with the current economic reality, all while maintaining public trust in its economic management capabilities.