The Ghana Chamber of Bulk Oil Distributors has expressed concerns over the government’s gold for oil policy, stating that it has put the bulk oil distributors in a challenging position, competing against the government itself. Dr. Patrick Kwaku Ofori, CEO of the Chamber, highlighted that the policy caught them off guard, as none of them had anticipated such a development.
The government’s gold for oil policy was implemented as a strategic move to address the foreign exchange constraints faced by the country. The objective of the policy is to enable the government to directly exchange gold for oil, bypassing the use of foreign currency, particularly the dollar, as a means to control inflation and preserve foreign reserves.
Discussing the impact of the policy on the oil distribution industry, Dr. Ofori emphasized that it would have repercussions on the revenue generation of regulators. He noted that the bulk oil distributors had paid their license fees without expecting to be sidelined in such a manner. He further emphasized that these private entities play a crucial role in the economy, employing Ghanaians and contributing through tax payments.
Dr. Ofori described the situation as a delicate one, highlighting that the program had affected private sector participation in the industry. He suggested that the government could reconsider its policy and create an environment that allows for private sector engagement. One possible approach he proposed was for the government to allocate a portion of the revenue generated from gold exports to finance the importation of refined products. This would enable both the private sector and public entities to participate in the importation process through competitive processes.
Alternatively, Dr. Ofori recommended that the Bank of Ghana could surrender all gold proceeds and revenue to ensure the availability of foreign exchange for commercial banks. This would allow all importers, both private and public, to have access to the necessary funds for their operations.
The concerns raised by the Ghana Chamber of Bulk Oil Distributors highlight the complexities and potential challenges associated with government policies that directly impact private sector players. Balancing the objectives of preserving foreign reserves and promoting a conducive business environment for private entities will require careful consideration and dialogue between the government and industry stakeholders.
Source: norvanreports