It is the aim of the Bank of Ghana (BoG) to transform and improve the country’s artisanal and small-scale gold mining sector through the Domestic Gold Purchase Programme (DGPP).
The Central Bank launched the DGPP in June 2021 mainly to improve the country’s foreign reserves and ensure a resilient economy through the purchase of locally sourced gold. At the time of the commencement of the programme, the existing stock of gold for the country was 8.74 tons. The programme is seeking to double the stock over a five-year period.
Apart from improving the gold reserves of the country, it has also emerged that the programme is also aimed at dealing with the canker of illegal mining in the small-scale sector which is threatening the environmental sustainability of the country.
Currently, the country is grappling with the impact of illegal mining, widely known as galamsey in the small-scale sector where many river bodies have been contaminated by turbidity and poisonous chemicals.
This contamination has heightened the risk of water shortage as some experts predict that the country might be forced to import water by 2030 if the devastation is not urgently reversed. Gaping pits have become death traps while residents continue to suffer different kinds of diseases and birth deformities.
Given these impacts, this initiative of the Bank of Ghana aims to integrate small-scale miners into the formal economy. The DGPP seeks to establish responsible gold supply chains that benefit both the miners and the nation. In doing so, the program provides a clear path for these miners to operate legally and responsibly.
According to the Central Bank’s document on Responsible Gold Sourcing Policy Framework, the initiative also tackles challenges such as illegal mining, environmental degradation, and poor working conditions, while offering small-scale miners a formal avenue to market their gold.
“The Bank also utilizes the DGPP as a channel to support reforms within the Artisanal and Small-Scale Gold Mining sector (ASGM), and to establish responsible supply chains for ASGM gold from Ghana,” parts of the document read.
To achieve this, the programme ensures stringent and due processes which ensure that only responsibly sourced gold enters the formal supply chain. Gold aggregators and small-scale miners must pass the Bank’s rigorous checks before being allowed to sell to BoG.
The framework states that the Bank “purchases dore gold from identifiable, responsible, and sustainable domestic gold mines through approved gold aggregators who have passed the Bank’s due diligence and sourcing policy test.”
By buying gold directly from small-scale miners, the Bank is effectively reducing the risks of illegal mining practices and boosting transparency. It is also ensuring that these miners receive fair compensation for their gold, which significantly reduces exploitation in informal markets.
