How Ghana lost over ¢2bn swapping Gold for fuel

A bold experiment with high stakes

In the face of surging fuel prices and a rapidly depreciating cedi, Ghana embarked on an unconventional economic experiment: swapping gold for oil. Launched in December 2022, the Gold for Oil (G4O) programme was designed to ease pressure on foreign exchange reserves and stabilise domestic fuel prices without further draining Ghana’s dwindling U.S. dollar reserves. But by March 2025, the Bank of Ghana officially pulled the plug—leaving behind over GH¢2.1 billion in financial losses and serious questions about transparency and oversight.

The rationale behind Gold for Oil

When diesel peaked at GH¢23 per litre and petrol hovered around GH¢17 in late 2022, the government and central bank were forced to act. With Ghana spending roughly $400 million a month on fuel imports—primarily in U.S. dollars—the dollar shortage was driving a currency crisis.

The G4O strategy aimed to leverage Ghana’s growing gold reserves, built through the Domestic Gold Purchase Programme launched in 2021. Instead of buying oil with scarce foreign currency, the central bank would buy gold in cedis, sell it abroad, and use the proceeds to import fuel. This, they hoped, would preserve Ghana’s dollar reserves and help stabilise the cedi.

How the programme worked

Through its partnership with the Precious Minerals Marketing Company (now GoldBOD), the Bank of Ghana purchased gold dore from local miners using cedis. The gold was then handed over to a gold broker, sold internationally for U.S. dollars, and the proceeds deposited into the central bank’s offshore accounts. These funds were used to procure fuel which was then delivered to Ghana.

However, the dollars themselves remained outside the country—never directly entering the local economy—a key flaw that undermined the programme’s supposed foreign exchange benefits.

Initial gains: Stabilisation and relief

In the early months, G4O seemed to work. The cedi’s freefall slowed, and fuel prices dipped. By November 2023, Finance Minister Ken Ofori-Atta told Parliament that the programme covered around 30% of Ghana’s fuel imports. While it was hard to isolate the programme’s effect from the IMF deal signed in May 2023, G4O likely played a role in reducing demand for dollars among oil importers.

The bill comes due

Despite early optimism, the Bank of Ghana’s financial statements for 2023 and 2024 revealed a stark reality:

• GH¢317 million lost in 2023
• GH¢1.82 billion lost in 2024
• Total: GH¢2.137 billion

These losses represented 45% of the GH¢4.69 billion the Bank had committed to the programme. Most of the losses, the Bank said, were due to foreign exchange losses—a bitter irony given the initiative’s original aim.

Lack of transparency fuels criticism

From its inception, the G4O programme operated in a murky space with little public oversight. The government insisted it was a Bank of Ghana initiative, not an executive policy, and therefore did not require parliamentary approval.

Crucial details remain undisclosed:

• The volume of gold traded
• The exact amount of fuel imported
• Intermediary and broker arrangements
• Fees and commissions paid

The opacity surrounding these key metrics has drawn sharp criticism from economists, MPs, and civil society groups who argue that such a significant programme should never have operated outside the scrutiny of Parliament.

The end of the road

On March 13, 2025, the Bank of Ghana officially ended the G4O initiative, citing the “unsustainable” financial burden. While it may have achieved some short-term relief, the cost proved far too high for the economy to bear.

Despite nearly quadrupling its gold reserves to over 32 tonnes in under four years—a success in its own right—the central bank’s attempt to convert that gold into an economic buffer failed to produce lasting results.

Lessons from a costly gamble

G4O was a bold and innovative solution to a real crisis. But its lack of transparency, accountability, and economic efficiency ultimately turned it into a GH¢2.1 billion lesson in policy risk.

It highlights the dangers of bypassing institutional checks and underlines the need for better governance in managing public resources—especially when the stakes involve not just gold, but the economic future of a nation.