By Alex Igbekhe
Ghana has initiated a policy shift that “mirrors” Nigeria’s naira-for-crude arrangement, as President John Dramani Mahama directs his finance and energy teams to explore cedi-denominated payments for locally produced crude oil, a move aimed at easing “mounting pressure” on the country’s foreign exchange reserves.
The directive was announced by Energy Minister Dr. John Abdulai Jinapor during the commissioning of refurbished facilities at the Tema Oil Refinery (TOR) recently, which also marked the official receipt of one million barrels of Ghana’s indigenous Jubilee Medium Sweet Crude for local refining.
Speaking at the ceremony, Dr. Jinapor recounted how the President raised the issue during a meeting at his residence. “I was at Mr. President’s house, and he said, ‘when the Tema Oil Refinery takes delivery of crude how do they pay?'” the minister recalled.
Dr. Jinapor explained that he responded: “Mr. President, in accordance with the Petroleum Holding Fund and the Petroleum Revenue Management Act, you have to go and look for dollars and pay in foreign currency.”
President Mahama then gave instructions, with the Finance Minister and Bank of Ghana Governor present. According to Dr. Jinapor, the President said: “Rethink, take a second look at it, when Tema Oil Refinery takes the crude and they process and sell it in Ghana cedis, why don’t we pay Ghana cedi into that account rather than going to the forex and buying dollars.”
The minister quoted the Central Bank Governor as immediately supporting the proposal: “Yes, Mr President, you are right, because when we go to the market and we buy forex, we put pressure on our currency, we add cost to it, so next week let’s have a meeting so that we can structure that.”
The policy bears “striking resemblance” to measures introduced by President Bola Tinubu in Nigeria in July 2024, under which domestic refineries purchase crude in naira rather than dollars.
Nigerian government has reported “significant gains” from the arrangement, including a reduction in forex pressure and reserve accumulation from US$4 billion in 2023 to over US$50 billion.
Ghana’s adoption of the policy comes amid “persistent depreciation” of the cedi, which has declined approximately 10.3 percent against the US dollar year-to-date, trading at around 11.61 cedis per dollar.
This performance ranks the cedi as the “weakest currency in West Africa” and among the “poorest performers on the continent.”
Despite a current account surplus of US$5.1 billion recorded in the first half of 2026 and moderating inflation, the currency continues to face “headwinds.”
The Bank of Ghana attributed the depreciation largely to “sustained corporate demand” for foreign exchange, particularly from the energy sector, “compounded” by rising global crude prices and geopolitical tensions.
Gross international reserves stood at US$12.9 billion at end-June 2026, down from US$13.8 billion in December 2025.
The central bank has maintained that reserves remain “adequate,” providing approximately five months of import cover, though analysts note the decline reflects “increased energy-related import bills.”
The Bank of Ghana has responded by holding the Monetary Policy Rate at 14 percent, “pausing” its easing cycle to insulate the economy from further currency volatility.
The proposed policy shift faces legal and operational challenges. Current provisions under Ghana’s Petroleum Holding Fund legislation and the Petroleum Revenue Management Act require crude payments to be made in foreign currency, “in line with” international oil trading conventions.
Crude oil is priced and traded internationally in US dollars under standard industry practice, and companies that own and sell crude invoice in dollars regardless of where the oil is produced or refined.
Dr. Jinapor has indicated that a structuring meeting involving the Finance Ministry, Central Bank, and energy officials has been scheduled to examine the legislative adjustments necessary for implementation. Officials have indicated that any transition would require “careful review” of existing regulatory frameworks.
Nigeria’s experience offers both “precedent and caution.” The naira-for-crude policy, formally implemented in October 2024, has been credited with “stabilising” domestic fuel supply and reducing dollar demand.
The Dangote Refinery has maintained production and even begun exporting refined products to other African markets, including South Africa and Kenya. However, the policy has not been “without challenges,” including initial resistance from international oil traders and concerns over pricing mechanisms.
For Ghana, the stakes are “immediate.” Fuel prices have already climbed this month in response to rising crude costs and cedi weakness. While officials acknowledge that cedi payments alone will not “fully insulate” consumers from global price movements, they argue the policy removes a “self-inflicted cost” that adds to end-user prices.
President Mahama has also directed the Energy Ministry to develop a strategic plan to increase TOR’s refining capacity to 100,000 barrels per day, with Dr. Jinapor noting that when TOR and Sentuo refineries are operating at peak capacity, “Ghana will no longer need to import crude oil” and could become “an exporter when it comes to finished products.” The minister has described the transformation of TOR as “critical to restoring investor confidence” and advancing the President’s “Reset Agenda.”
The Ghanaian initiative signals “growing regional interest” in currency-sovereignty measures as West African nations grapple with forex shortages and volatile exchange rates. Whether Accra can “replicate” Abuja’s reported success will depend on implementation details and the broader macroeconomic environment.
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