Although the Ghana Gold Board’s (GoldBod) policy to buy gold at a premium price is well-intentioned, it is emerging that it is a signal of weak policy and poor law enforcement.
The Goldbod and the BoG, under the Domestic Gold Purchasing Programme, are buying gold at higher-than-market prices with the aim of curbing smuggling so that the country can retain the full value of its mineral resources.
But the Executive Director of the Africa Centre for Energy Policy (ACEP), Benjamin Boakye, says while the intention may sound nice, it is a costly admission that Ghana’s governance systems and enforcement are failing.
In an article titled “When Policy Credibility Is Tested: Gold, the Cedi, and the Cost of Short Term Wins,” cited by The High Street Journal, Benjamin Boakye argues that the justification behind GoldBod and the Bank of Ghana’s decision to purchase small-scale mining gold at premium prices is fundamentally flawed.
Smuggling, he insists, is not a pricing problem. It is a governance problem. The idea that smugglers must be “outbid” to keep gold in Ghana, Boakye says, turns public policy on its head.
“The justification advanced for buying gold at a premium is that it curbs smuggling. This argument exposes a deeper policy failure. Smuggling is not driven by insufficient incentives but by weak enforcement and official complicity,” he explained.
He argues that smuggling thrives not because incentives are too weak, but because enforcement is weak and, in some cases, compromised. He therefore insists that the decision to pay more for gold does not fix porous borders, lax oversight, or the involvement of officials who are meant to protect the system.
In further justification, he recounts that investigations by ACEP and JoyNews have already shown how gold leaves the country through Kotoka International Airport with the knowledge and participation of state actors. With such a situation, paying more is not the ultimate solution.
By paying premium prices, the state risks compensating illegal networks rather than dismantling them. Instead of tightening controls, improving traceability, and enforcing existing laws, the policy shifts public money toward actors operating outside the law.
“Investigations by ACEP and JoyNews have demonstrated how gold exits Ghana through the airport with the involvement of state officials. Smuggling networks are not hidden from actors within the sector. Crucially, producers themselves are rarely the smugglers. The appropriate response to smuggling is regulatory enforcement, not financial compensation to the illegal operations,” he explained.
He continued, “Smugglers respond to economic incentives, and cross-border patterns shift according to relative policy regimes. ACEP’s work shows how artisanal and small-scale gold has historically flowed towards jurisdictions with lower export charges across the subregion because of weak enforcement.”
Benjamin Boakye says this approach means the state is negotiating with illegality rather than confronting it. In effect, it rewards failure in enforcement with higher financial incentives.
The Executive Director of ACEP believes the solution is straightforward, even if politically uncomfortable. He urges the government to fix the institutions and strengthen border controls.
He adds that authorities must hold complicit officials accountable and also clean up the export chain. Without these steps, paying premiums only masks the real problem and drains public resources.
