The Ghanaian government has taken decisive action to bolster national revenue by banning foreigners from trading in its gold market, a move that follows the establishment of the Ghana Gold Board (GoldBod) tasked with regulating gold transactions. The initiative combats rampant illegal mining and aims to stabilize the economy.
Ghana Enacts Ban on Foreign Gold Traders to Enhance National Revenue
Ghana Enacts Ban on Foreign Gold Traders to Enhance National Revenue
New regulations prohibit foreign participation in Ghana's gold market, aiming to streamline the mining sector and boost economic stability.
Ghana has officially banned all foreign individuals from trading in its local gold market as part of a strategy to enhance national revenue and regulate the country’s mining sector. This decision follows the introduction of legislation granting exclusive trading authority to the newly formed Ghana Gold Board (GoldBod). The official directive stipulates that all foreign traders must exit by April 30, 2025, as communicated by GoldBod spokesperson Prince Kwame Minkah.
Africa's leading gold producer, Ghana faces significant challenges, including illegal mining known locally as "galamsey." The mining sector's unregulated activities have led to environmental degradation and a lack of profit retention, especially given the country's status as the world's second-largest cocoa producer. Despite enforcement actions against illegal mining, the sector has continued to flourish, driven by rising gold prices and high youth unemployment, making it a significant issue in the recent election cycle.
Chinese nationals, often involved in Ghana's informal mining operations, have frequently been criticized for neglecting environmental responsibilities. The new legislation recognizes GoldBod as the exclusive buyer, seller, and exporter of gold produced by the artisanal and small-scale mining sectors. While foreigners may still apply to purchase gold directly from GoldBod, their engagement in the local value chain is now restricted. Local dealers’ licenses have been revoked; however, a grace period is in place to facilitate a seamless transition before the law takes full effect next month.
Transactions involving gold will now only be conducted in Ghanian cedi, with prices set according to Bank of Ghana exchange rates. GoldBod officials stated that any dealings in gold without a license from the new authority will be regarded as a criminal offense. The government has earmarked $279 million (£212 million) for GoldBod to purchase and export a minimum of three tonnes of gold weekly to enhance foreign exchange inflows and stabilize the currency, as expressed by Finance Minister Cassel Ato Forson.
While some industry figures, like Kwaku Effah Asuahene, chairman of the Chamber of Bullion Traders Ghana, express concern over the government’s capacity to generate sufficient revenue for gold purchasing, they support the initiative. There is a desire for partnerships with foreign investors to further strengthen the market.
Although the legislation does not specifically target illegal mining, it could hinder illegal miners from selling gold domestically. Ghana has been grappling with severe environmental issues, with over 60% of its water bodies impacted by mining activities.
The ban marks a significant commitment by the Mahama administration to enforce regulatory measures in the gold sector and fulfill its campaign pledge to tackle illegal mining. Mining governance consultant Nana Asante Krobea noted that if effectively implemented, the law could enhance government revenue and impose order in the gold sector. Last year, Ghana’s gold exports surged by 53.2% to $11.64 billion, with nearly $5 billion attributed to legal small-scale miners. As trade tensions between the U.S. and China rise, gold prices have soared, reaching $3,200 per ounce, leading investors to flock to this commodity amidst financial uncertainties.
Africa's leading gold producer, Ghana faces significant challenges, including illegal mining known locally as "galamsey." The mining sector's unregulated activities have led to environmental degradation and a lack of profit retention, especially given the country's status as the world's second-largest cocoa producer. Despite enforcement actions against illegal mining, the sector has continued to flourish, driven by rising gold prices and high youth unemployment, making it a significant issue in the recent election cycle.
Chinese nationals, often involved in Ghana's informal mining operations, have frequently been criticized for neglecting environmental responsibilities. The new legislation recognizes GoldBod as the exclusive buyer, seller, and exporter of gold produced by the artisanal and small-scale mining sectors. While foreigners may still apply to purchase gold directly from GoldBod, their engagement in the local value chain is now restricted. Local dealers’ licenses have been revoked; however, a grace period is in place to facilitate a seamless transition before the law takes full effect next month.
Transactions involving gold will now only be conducted in Ghanian cedi, with prices set according to Bank of Ghana exchange rates. GoldBod officials stated that any dealings in gold without a license from the new authority will be regarded as a criminal offense. The government has earmarked $279 million (£212 million) for GoldBod to purchase and export a minimum of three tonnes of gold weekly to enhance foreign exchange inflows and stabilize the currency, as expressed by Finance Minister Cassel Ato Forson.
While some industry figures, like Kwaku Effah Asuahene, chairman of the Chamber of Bullion Traders Ghana, express concern over the government’s capacity to generate sufficient revenue for gold purchasing, they support the initiative. There is a desire for partnerships with foreign investors to further strengthen the market.
Although the legislation does not specifically target illegal mining, it could hinder illegal miners from selling gold domestically. Ghana has been grappling with severe environmental issues, with over 60% of its water bodies impacted by mining activities.
The ban marks a significant commitment by the Mahama administration to enforce regulatory measures in the gold sector and fulfill its campaign pledge to tackle illegal mining. Mining governance consultant Nana Asante Krobea noted that if effectively implemented, the law could enhance government revenue and impose order in the gold sector. Last year, Ghana’s gold exports surged by 53.2% to $11.64 billion, with nearly $5 billion attributed to legal small-scale miners. As trade tensions between the U.S. and China rise, gold prices have soared, reaching $3,200 per ounce, leading investors to flock to this commodity amidst financial uncertainties.
