Professor Patrick Esuming, a leading economist at the University of Ghana, has dismissed the effectiveness of the gold for oil program as a solution to the cedi’s depreciation.
During an interview with ABC News Ghana on Monday, August 19, 2024, Prof. Esuming questioned the feasibility of Vice President Dr. Mahamudu Bawumia’s recent promise to stabilize the cedi through this policy if his party, the New Patriotic Party (NPP), wins the upcoming December 7th elections.
Bawumia had unveiled this plan at the NPP’s manifesto launch in Takoradi, positioning it as a cornerstone of his economic agenda.
Prof. Esuming expressed skepticism about the gold for oil initiative, stating, “I think it is a hard-sell, because we’ve had this program for more than a year now. And as you can tell, the currency is not stable.”
He criticized the idea that merely expanding the scope of this program would address the cedi’s instability.
He highlighted concerns about potential corruption associated with large-scale exchange programs like gold for oil and noted that international institutions such as the IMF have raised questions about the initiative’s efficacy.
While acknowledging that gold reserve exchange programs have their merits, Prof. Esuming cautioned against relying on the gold for oil strategy as a quick fix.
“To say implementing the gold for oil will solve the cedi problem, I think is too much, it is far-fetched,” he remarked.
He further emphasized that without addressing broader issues such as inefficient implementation of economic laws and unnecessary imports, stabilizing the currency will remain a distant goal.
