The architect of Ghana’s two most unconventional economic policies, former Vice President and NPP flagbearer for 2028 elections, Dr. Mahamudu Bawumia has explained what drove him to introduce his transformative initiatives.

Speaking in Accra to members of the Ghana Small-scale Miners Association, Dr. Bawumia said two interlinked problems compelled him to "think outside the box" for sustainable solution when he was Vice President of Ghana.

The first problem, he said, was the sudden stop in external financing following the impact of  COVID-19 and the Russia-Ukraine war on the economy. 

“That tap (external financing) was shut for Ghana and quite a few countries. And for us, it resulted in a balance of payments crisis.”

The second Problem, he noted, was the IMF conditions to the country. 

Dr. Bawumia revealed that while Ghana was in an IMF programme to restore confidence, one condition the institution gave Ghana was that the Bank of Ghana could only use $80 million a month to intervene in the forex market.

“You can imagine what the demand for foreign exchange for Ghana would be on a monthly basis. Significantly more than $80 million a month. And so, in that framework, there was only one result. Because when demand exceeds supply, prices would go up, isn't it? The cedi started depreciating daily."

He said the idea for his “Gold for Oil” programme was to bypass the dollar constraint entirely by bartering gold for fuel to avoid shortage of fuel. 

He added that his second initiative, the “Gold for Reserves”, was birthed while he was exercising as he asked himself “why does Ghana which mines gold everyday have to export cocoa to get dollars for its forex  reserves?”

”Why not buy the gold we already produce with cedis?” he also quizzed himself.

Dr. Bawumia described this as "out-of-the-box thinking”, stressing “it was not a textbook idea. There's no textbook in economics that will tell you about the Gold-for-Reserves programme”.

The former Vice President added that he suggested these ideas to the Bank of Ghana which took almost a year to do due diligence because the programmes were so unorthodox, hence “we were worried they (Bank of Ghana) might get into trouble for doing something that was very unorthodox”.

"Finally, they agreed, and Ghana became the first country in Africa and probably the world, to implement such a programme.”

And now, he said, “other countries are coming to learn from Ghana”.