Ghana introduced a new payment arrangement for petroleum imports in 2023, using gold instead of scarce US dollars. The policy was designed to ease pressure on the cedi by reducing the need for upfront dollar purchases to settle fuel import bills.
In an import-dependent economy, rising demand for US dollars usually weakens the domestic currency. Importers must exchange local currency for dollars. As the local currency loses value, the local cost of imports rises, driving inflation.
Ghana’s petroleum-for-gold strategy delivered short-term benefits. It reduced immediate demand for foreign exchange, supported relative stability in the cedi and contributed to moderating fuel price pressures and inflation.
