As Ghana ramps up efforts to shore up its gold reserves through the operations of the newly established Ghana Gold Board (Goldbod), experts and stakeholders are raising alarms over the risk of inadvertently fueling illegal mining activities.
The Goldbod’s mandate to purchase more gold from small-scale miners as part of a broader strategy to strengthen the country’s reserves and stabilize the cedi has been widely praised for its economic benefits. Indeed, the increased gold holdings are already contributing positively to Ghana’s macroeconomic indicators, especially foreign exchange management.
However, analysts warn that without strong safeguards, the Board’s well-intentioned gold purchasing programme could inadvertently incentivize illegal small-scale mining, commonly known as “galamsey.” The concern is that in the rush to buy more gold, the system could become vulnerable to laundering illegally mined gold into the formal economy.
Experts say every gram of gold that Goldbod buys should be traceable to a legal, environmentally compliant source. They say failure to do so risks undoing the progress the country is making in combating illegal mining.”
The fear is rooted in the informal nature of Ghana’s artisanal mining sector. While many small-scale miners are licensed, a significant number still operate without regulation, causing severe environmental degradation and water pollution. If unregistered miners see an opportunity to sell gold at competitive rates through middle men to the Goldbod without scrutiny, it could create fresh incentives to bypass the licensing process altogether.
According to the Ministry of Lands and Natural Resources, nearly 30% of Ghana’s gold output comes from the small-scale sector. While this represents significant economic potential, it also exposes the state to serious risks if transparency mechanisms are not enforced.
Gold is a high-value commodity. Without traceability, there may be no way to ensure that what’s being bought didn’t come at the cost of destroyed forests or poisoned rivers, analysts have argued.
Chief Executive of the Goldbod Sammy Gyamfi had indicated his commitment to make gold purchased traceable from the last quarter of this year. While this is assuring, industry watchers are urging the government and the Goldbod to prioritize the implementation of a gold traceability framework that uses technology to track the origin, handling, and sale of every purchase made. Blockchain solutions, QR-coded shipment bags, and digital mining passports for registered small-scale operators have been proposed as possible tools to mitigate the risk.
In countries like the Democratic Republic of Congo and Rwanda, similar frameworks have been used to monitor the origin of conflict minerals. Ghana could draw from these international best practices to design a system tailored to its own mining context.
The Minerals Commission has indicated its willingness to explore such systems, but a clear national policy directive and timeline have yet to be outlined.
While the Goldbod’s establishment is an important step in leveraging Ghana’s natural wealth to drive economic resilience, the unintended consequences of its gold acquisition strategy must not be overlooked.
