A former Chief Executive Officer of the Ghana National Petroleum Authority (GNPC) has slammed the Akufo-Addo Bawumia government’s so-called Gold for Oil policy because according to him, it will not bring any extra foreign exchange to the country because it is the same gold that currently is being sold by the licensed exporter with the revenue already being remitted back to Ghana.
Explaining his position on the matter in an interview with the DAILY POST over the weekend, Mr. Alex Mould said all revenue from Ghana’s gold exports via large scale, small scale, and community miners accrues to, and is brought back into the country either through the Bank of Ghana (BoG) and/or commercial banks ,the only exception being those Mining Companies that government has approved to withhold some remittances.
“Thus, no new foreign exchange will accrue to Ghana from this sale of gold by BoG via the Domestic Purchase Programme (DGP); it is the same gold that has already been sold by the licensed exporter, the revenue for which is already being remitted back to Ghana (via BoG and commercial banks)! If government decides to export the gold directly via BoG’s DGP program, then the licensed Exporters’ share of gold exports will reduce whereas the share of gold exports by Bank of Ghana will increase.
This is a zero-sum game as no additional gold will be sold – it will just be a *redistribution of the export proceeds accruing to licensed exporters and to BoG via PMMC”, he said.
Alex Mould questioned how the PMMC is funding it if it is purchasing the Gold in Cedis .
“Is government (BoG) lending them money? If so, is that the remit of BoG to engage in commercial banking activities thus crowding out the commercial banks?”, he queried.
Alex Mould, who is also a former CEO of the National Petroleum Authority (NPA) said the foreign exchange accruing to Ghana from gold exports (as a country) will not change because BoG already gets all the forex from gold sales by the small scale miners. (Let’s find out if this is supported by law or by regulation of policy)
“There will be NO SIGNIFICANT pump price change unless we experience either a 10-20% change in the crude oil price (from $85/bbl to $70/bbl), or the exchange rate drops from 12.5 to 11.00 Cedis per dollar”, he said.
“What transparent bidding process will Govt use to ensure that they receive a competitive contract?
Who will be the importer on record – BOST or a BDC? Will the bidding be advertised? Who will be invited – IOTCs, indigenous BDCs? Will the results be published? How will we know that they are achieving a lower price compared to the other licensed BDCs who import products into the market?” he querried.
Alex Mould told the DAILY POST that since the country is not exporting additional gold there will be no new forex revenue coming into the country and as such the program will NOT reduce the forex pressure in the country!
“Government is simply allocating a specific portion of the export proceeds received into the country towards the purchase of imported petroleum products; this is something they could still do as all the export proceeds by licensed exporters are already channeled through BoG”, he said.
According to him, from a cashflow perspective there is no difference between Barter and Broker channels, BUT the risks involved are different!
“Is BOST acting as an agent for BoG in the importation of petroleum products in this “offtaker” role, or is BOST the buyer and importer on record?
– If NOT then who is the Importer on record ?
And, if BOST is the importer, does BoG have a license to act as a BDC ie to import products and sell to OMCs?
– is the mandate of BOST and NPA license issued to BOST allow it to act as a BDC or is the NPA license specific for the import of strategic stocks?” he queried again.
Alex Mould said BDCs are the only peteoleum service provider (PSP) licensed to import products for sale to OMCs, and since BoST does not have a paid-for BDC license – last time he checked – he wondered if this oil import is a strategic stock purchase under the strategic stock programme ?
Under the G4O program, it is envisaged that BOST will be selling to BDCs instead of OMCs, which made him pose the question if the BDCs are allowed to sell to BDCs or only to OMCs?
Lastly, Mr Mould raised the question on the validity of BOST license have for the importation of petroleum products, and if that their license fee was fully paid up for for 2022 and 2023.
