A former Deputy Minister of Energy, Joseph Cudjoe, has reiterated the necessity for Ghanaians to see authorities’s Gold for Oil coverage as an modern strategy in coping with the nation’s over-reliance on foreign exchange, which hurts the economic system.
Government’s G4O coverage has acquired many evaluations with opponents describing the coverage as a foul one.
But now Minister for Public Enterprises Joseph Cudjoe somewhat describes the G4O Policy as a wise transfer which is able to “avoid increasing Ghana’s demand for dollars so that the price of dollars will not go up by heart”.
Below are his justifications:
A MATTER ARISING: THE GOLD FOR OIL WISDOM!
1. Oil importers in Ghana referred to as BDCs (Bulk Distribution Companies) promote petrol and diesel in Cedis via gasoline stations of the OMCs (Oil Marketing Companies). Yes. They promote in Cedis.
2. They need to import petrol and diesel once more however they can not use the Cedis to import.
3. Fact is that they’ll import with gold or they’ll import with {dollars} as a result of some oil exporters on the market settle for gold. Unfortunately, they don’t settle for Cedis.
4. If BDCs need to use {dollars} to import their oil, they’ve to purchase {dollars} with the Cedis they’ve. If they need to use gold to import their oil, they’ve to purchase gold with the Cedis they’ve.
5. The downside with BDCs making an attempt to make use of {dollars} to import is that, their heavy demand for {dollars} at all times will increase the worth of the greenback. That is, they trigger depreciation of the cedi in opposition to the greenback.
6. We all know this downside and but we’ve lived with it for years.
7. Then comes the Smart transfer by the economics wizard – Bawumia. His query is easy. Why don’t you purchase gold with the Cedis you might have and use the gold to purchase/import the oil? Why do you continue to need to purchase {dollars} along with your Cedis and use the {dollars} to import the oil?
8. Bawumia goes on to say you individuals know that if you use the Cedis to purchase {dollars}, you improve demand for {dollars} and the worth of {dollars} go up and also you complain.
9. So merely use your Cedis to purchase gold and use the gold to purchase oil. In this case you keep away from growing Ghana’s demand for {dollars} in order that the worth of {dollars} won’t go up by coronary heart.
Isn’t this a Smart Move?
Hon Joseph Cudjoe
MP for EFFIA Constituency
Minister for Public Enterprises
#[email protected]!!!
Source: 3news.com
