In March 2025, Ghana enacted the GOLDBOD ACT, establishing the Ghana Gold Board—commonly referred to as GOLDBOD—to manage, regulate, and trade gold produced by artisanal and small-scale miners (ASM).

Its mandate includes purchasing, assaying, exporting, and marketing gold from licensed ASM operators, backed by a US $279 million revolving fund—enabling purchases of up to three tonnes of gold per week.

 The reported export volume of 9,295 kilogrammes of gold in the month of April representing $897.5 million USD seems like the GOLDBOD’s wedding present to the nation.

It is a good start.

The nation expects consistent profitable operations. An achievement which could only be earned through an equally consistent enforcement of proven policies and programmes.

 Touted as a transformative solution to curb gold smuggling, enhance foreign exchange (FX) reserves, and improve traceability, GOLDBOD nonetheless has challenges it must address with regards its structure, leadership, an indirect negative environmental impact of its operations, and alignment with best governance practices.

 Concerns on the GOLDBOD

1. Environmental Degradation and Potential to Fuel Galamsey

By acting as a guaranteed buyer, GOLDBOD may inadvertently incentivise illegal small-scale mining (“galamsey”), exacerbating environmental destruction. Unlike cocoa farmers, gold miners often operate in syndicates deeply embedded in political networks.

Entrenching state-backed demand could fuel further land degradation and water pollution.

Thus by “guaranteeing a government-backed buyer for small-scale gold production, this initiative could fuel further illegal mining, land degradation, and water pollution—all while failing to deliver sustainable, long-term economic benefits.”

 2.  Economic and Monetary Risks

GOLDBOD’s operational model also poses broader risks to Ghana’s monetary framework. As GOLDBOD purchases gold directly for the Bank of Ghana, this injects cedi liquidity into the economy. Without proper “sterilisation” via open market operations or reserve requirements, this becomes quasi-monetary expansion potentially compromising inflation control and blurring fiscal-monetary boundaries.

 3.  Discriminatory and Inefficient Approach

A critical feature of GOLDBOD is that it focuses exclusively on small-scale miners, offering incentives like waiving VAT on unprocessed gold from ASM operators. This raises concerns about inequity, as large-scale miners who face stringent oversight are excluded from similar concessions and may feel they are being penalised. Moreover, parallels with COCOBOD illustrate the financial pitfalls of state-controlled commodity bodies. COCOBOD reportedly has debts exceeding 32 billion Ghana cedis, raising doubts about the profitability of GOLDBOD’s model and the risks it exposes itself to if control mechanisms are not quickly put in place.

4. Conflict of Interest: Commercial and Regulatory Functions Combined

The GOLDBOD consolidates regulatory oversight with commercial operations—a model discouraged by global best practices. Former Finance Minister Dr Mohammed Amin Adam warned during parliamentary deliberations that: “If this bill is passed, GOLDBOD will be a commercial entity that trades and exports gold while also acting as a regulator and court. That is not right.” He highlighted how Ghana’s petroleum sector maintains a clear separation between regulation (by the Petroleum Commission) and commercial activity (by GNPC), exemplifying the structural clarity missing in GOLDBOD’s design. Merging these roles risks undermining oversight and accountability of the sector.

5. Calls for the Sustainability and profitability of the GOLDBOD

The 2025 national budget has allocated $279 million (approximately GH¢4.3 billion) as a revolving fund for GOLDBOD. This fund is intended to facilitate the purchase and export of at least 3 tonnes of gold per week from small-scale miners, demonstrating the government’s commitment to the BOD. However, while this investment presents an opportunity for a more structured and transparent gold market, it also raises serious concerns about the long-term financial sustainability and profitability of GOLDBOD.

A major concern is whether GOLDBOD can generate enough revenue to sustain its operations without continuous government funding. While the revolving fund is meant to facilitate initial purchases and exports, can the GOLDBOD operate efficiently to avoid reliance on repeated government support, thereby burdening taxpayers and increasing the national debt?

If GOLDBOD cannot compete with private gold buyers or fails to offer competitive pricing, small-scale miners may opt out, leading to reduced supply and financial losses. GOLDBOD must adopt a business-oriented approach, with clear profitability models, cost control mechanisms, and independent financial oversight to ensure accountability and efficiency.

Paths Forward: Designing GOLDBOD for Better Outcomes

 While criticisms are compelling, GOLDBOD is not irredeemable. With structural recalibrations and strong governance, it could still deliver on its promise if reformed thoughtfully.

1. Separate Commercial and Regulatory functions to align with international best practices:

a.      Establish two distinct entities:

                                                              i.      A commercial arm responsible for sourcing and exporting gold.

                                                            ii.      A regulatory body independent of commercial interests, overseeing licensing, environmental compliance, and judicial or adjudicatory roles.

b.      Drawing from the petroleum sector, this separation can eschew conflicts and uphold integrity.

2.       Strengthen Board Qualifications;

a.      Appoint board members with demonstrable expertise in commodity markets, global trade, and economic governance—not purely political alignments.

b.      Include independent experts such as economists, environmental scientists, local community representatives to enhance oversight and accountability.

3.      Embed Environmental Safeguards and Traceability to mitigate environmental harms:

a.      Mandate traceability mechanisms for all gold through certification, geotagging, or digital tracking from mine to export.

b.      Partner with private sector specialists like technology firms focusing on supply-chain tracking to monitor ASM operations and ensure sustainably sourced gold.

c.      Require environmental impact assessments, regular audits, and sanctions for noncompliance with mining regulations and environmental standards.

d.      Prevent GOLDBOD from inadvertently rewarding galamsey by restricting purchase eligibility to licensed, environmentally compliant operations.

4.      Empower Monetary Policy through Financial Architecture to ensure macroeconomic stability:

a.      Coordinate with the Bank of Ghana on cedi inflows, guaranteeing that every purchase is matched by sterilisation mechanisms (e.g., reverse repo operations, bond issuance) to avoid injecting unabsorbed liquidity.

b.      Clearly define and legislate GOLDBOD’s fiscal relationship with the central bank to preserve inflation control and fiscal transparency.

5.      Balance incentives across mining sectors to reduce distortionary effects:

a.      Reassess incentives like VAT waivers to ensure that large-scale miners are not unduly disadvantaged, fostering a more equitable gold sector.

b.      Instead of broad tax holidays, introduce performance-linked incentives: tax breaks based on transparency, environmental compliance, and traceability.

c.      Facilitate collaboration between small- and large-scale operators through shared infrastructure (e.g., assay centres), encouraging formalisation and efficiency.

6.      Advance Economic Diversification: Long-term sustainability demands moving beyond extractives:

a.      As critics warn, Ghana risks over-reliance on raw commodity exports, leaving the economy vulnerable to external shocks like gold price swings.

b.      Invest revenues from gold into value-added industries such as gold refining, jewellery manufacturing, and technology-driven services in order to build a more resilient productive base. This real economic transformation could create sustainable jobs, unlike rent-driven models.

c.      Prioritise sectors with spillover benefits such as agriculture, renewable energy, and digital services to reduce dependency on mining and fortify economic stability.

In moving forward, GOLDBOD should consider the following technical issues as well;

1.      Strengthen and expand digital traceability.

2.      Upgrade assay and refinery infrastructure strategically.

3.      Advance value addition and implement the gold village vision.

4.      Enhance stakeholder engagement and pricing mechanisms.

5.      Targeted social investments and scholarships to generate acceptability and meaningfulness to the average Ghanaian.

6.      Institutionalise anti-smuggling strategies.

7.      Support small-scale miners with capital, equipment and training.

8.      Explore financial instruments to lock in value for operators within the gold chain.

Given that GOLDBOD holds gold reserves and supports forex strategy, it should be innovative in its operations. These innovations could include:

1.      Gold-backed savings products (e.g., “GOLDBOD Coins”) for individuals, helping domestic wealth retention and reducing dollarisation.

2.      Forward contracting mechanisms that allow miners to hedge price risk, protecting them from market volatility and improving planning capability.

Conclusion

 GOLDBOD has the potential to transform Ghana’s gold sector, recover significant lost revenues, and enhance foreign exchange reserves through structured mineral trade. By realigning GOLDBOD along these dimensions, Ghana can turn a criticised initiative into a game-changing lever which enriches the economy without costing the environment. The path to reform is necessary to improve the structure and viability of the GOLDBOD for its long-term sustainability.

Arnold Boateng, Author / Consultant

EMAIL: arnoldboateng@gmail.com