Gold for Oil not a Long-term Fix, Structural Energy Reforms Needed – Dr Theo Acheampong Says
Petroleum Economist and Political Risk Analyst, Dr Theo Acheampong, has asserted that Ghana’s “Gold for Oil” programme (currently suspended by the Central Bank), is not a viable long-term solution to the country’s energy and foreign exchange challenges, advocating instead for robust structural reforms in the energy sector and a renewed focus on building foreign reserves.
Speaking during the NorvanReports and Economic Governance Platform (EGP) X Space discussion themed “Oil Wars, Broken Systems: What The Iran-Israel Conflict Really Means for Ghana’s Revenue, Reserves & Reform Path”, Dr Acheampong questioned the rationale behind continuing the Gold for Oil programme at a time when Ghana’s reserve position had significantly improved.
“At the time we entered the Gold for Oil deal, our reserves were dangerously low around two weeks of import cover. As we speak now, it’s about 4.7 months, well above the IMF’s three-month benchmark for economies like ours,” he stated.
He argued that rather than relying on barter arrangements, Ghana’s priority should be improving its reserve buffers through sound macroeconomic and monetary policies spearheaded by the Bank of Ghana.
Dr Acheampong endorsed the Bank of Ghana Governor’s call to review the Gold for Oil programme, citing transparency concerns and lack of clarity around the companies involved. “To date, we still don’t know which companies were awarded the contracts, what the pricing mechanisms were, and whether the programme ultimately benefited the country,” he noted.
Recalling past failures in Ghana’s engagement with derivative contracts, including losses during the AngloGold hedging arrangements of the late 1990s, Dr Acheampong urged a cautious approach to such policy tools.
Beyond the reserves and transparency concerns, the energy economist highlighted a broader need for structural reforms in the sector, noting that solutions lie in strengthening domestic capacity.
“We need to urgently invest in a second gas processing plant. I sit on the committee set up by the minister to assess this, and it’s clear to us that a second gas facility will help reduce crude imports, cut emissions, and utilise our offshore gas resources more efficiently,” he disclosed.
On renewable energy, Dr Acheampong recommended shifting focus from household-level solar to utility-scale projects, employing auction systems as successfully implemented in countries such as Morocco, South Africa, Zambia, and the UAE. “This could bring between 300 to 400 megawatts of renewable energy onto the grid,” he projected.
Dr Acheampong further pointed to the underperformance of key state institutions such as the Bulk Oil Storage and Transportation (BOST) Company and the Tema Oil Refinery (TOR), describing them as critical players that have been relegated to redundant roles. “TOR has become a tank farm. It hasn’t refined a drop of crude in over a decade, while BOST competes with Bulk Distribution Companies (BDCs) instead of playing its strategic role,” he lamented.
On the utility pricing front, he indicated that Ghana already has mechanisms such as the automatic adjustment formula under the oversight of the Public Utilities Regulatory Commission (PURC), which if consistently applied, could resolve cost-pass-through concerns without the need for ad hoc policy interventions.
“Some of these issues are not new. We discussed them 10 years ago, and five years ago—yet here we are again,” he stressed.
He concluded with a call for a national economic reorientation. “We need to build a resilient, export-led economy, anchored on agriculture and manufacturing value chains. That is what will ultimately improve living standards and shield us from external shocks,” he said.
Dr Acheampong’s remarks underscore a growing sentiment among economic analysts urging government to focus less on short-term fixes and more on long-term structural transformation of the energy sector and the economy at large.
