Policy Analyst Alfred Appiah is introducing a new policy debate over Ghana’s approach to tackling illegal mining, popularly known as galamsey, after the Bank of Ghana (BoG) recorded a significant loss in its domestic gold purchasing program.
The latest 2025 Audited Financial Statement of the Bank of Ghana reveals that the Central Bank recorded a loss of GHC 8.8 billion in its gold for reserves programme, adding the loss in the gold-for-oil initiative, and the loss jumps to over GHC 9 billion.
Alfred Appiah believes that the involvement of the state in purchasing gold can be linked to the illegal mining menace, which the government is struggling to fight.
Alfred Appiah argues that the current model creates a costly contradiction. He explains that the state is effectively fighting illegal mining on one hand, while indirectly sustaining it on the other, and even making financial losses in addition.
At the centre of the issue is the government’s gold purchasing programme, implemented largely through the Goldbod, with financial backing from the Bank of Ghana. The programme is designed to buy gold locally, boost reserves, and generate foreign exchange. But according to critics, the execution raises difficult questions.
For the critics, despite the effort, illegal mining remains prevalent, and a significant portion of the galamsey gold is entering the formal buying system. That means the state is likely purchasing gold tied to environmental destruction and regulatory breaches, and in addition, absorbing financial losses in the process.
In practical terms, the argument is about incentives and consequences. When the state buys gold without fully addressing its source, it risks creating a ready market for illegal production. This can weaken enforcement efforts, as miners still find buyers for their output despite operating outside the law.
At the same time, the financial side of the model adds another layer of risk. Buying gold at prices that do not sufficiently cover costs, such as aggregation, logistics, and price fluctuations, can quickly erode trading capital. When losses accumulate, the burden ultimately shifts back to the public through recapitalisation of state institutions.
“There is still a lot of work to be done. If we rush to declare success prematurely while losses are being incurred, the hard work will not get done. If the state cannot #StopGalamseyNow, it should not also be buying galamsey gold, recording losses, and then needing to recapitalize the Bank of Ghana and the Goldbod as a result,” he insisted.
Alfred Appiah’s position is that these two problems, illegal mining and financial losses, should not be allowed to coexist within the same policy framework.
If the state is unable to decisively curb galamsey, he argues, it should not compound the problem by purchasing the output and recording losses on top.
