(Bloomberg) -- Ghana, Africa’s second-largest gold producer, ordered large mining companies to sell 20% of the metal they refine to the nation’s central bank, as the government embarks on a plan to barter bullion for fuel.
The directive will be effective Jan. 1, Minister for Lands and Natural Resources Samuel Jinapor said in a notice posted on Vice President Mahamudu Bawumia’s Facebook page. The government also ordered small-scale miners to sell their gold to the state-owned Precious Minerals Marketing Co. Bawumia said on Thursday the government was planning to use bullion to buy fuel.
From bartering gold to a plan to ask international bondholders to accept losses on the principal, Ghana’s government is scrambling to find ways to stem a slide in the cedi and make way for a bailout by the International Monetary Fund. The West African nation has been buying gold from mining companies since last year. The latest move ramps up the purchases.
Rising demand for imports has seen the cedi plunge 57% this year, making it the world’s worst-performing currency.
Buying from small-scale miners “alone is enough to help us meet our need for $400 million for petroleum imports per month,” said Kabiru Mahama, an economic adviser to Bawumia.
The Bank of Ghana and the government’s marketing arm will buy the gold from companies including Newmont Corp., AngloGold Ashanti Ltd., Gold Fields Ltd. in “cedis at spot price with no discounts,” according to the notice.
“We’ve not yet received the formal directive, but look forward to studying it and engaging with the government once we do,” Stewart Bailey, a spokesman for AngloGold said via email.
Gold Fields said it will sell 15,000 ounces of the metal to the central bank this year and is in discussions with authorities for 2023.
--With assistance from Felix Njini.
(Updates with comment from economic adviser in fourth paragraph.)
©2022 Bloomberg L.P.