In this article, the author assesses the impact of the current government’s flagship GoldBod policy. The author argues that the policy will intensify illegal mining and its related consequences. This happens as the policy incentivizes a rather precarious sector. It is further argued that the government should not engage directly in all steps of small-scale mining.
Instead, it should involve private gold tracking companies. These companies can track and monitor gold from the small-scale mining sector at all levels. This ensures maximum value from the sector, which contributes 40% to Ghana’s total gold production. The small-scale mining sector remains informal and disorganized. Because of this, Ghana tends to lose tax and royalty revenues, as production and trading remain untracked and unmonitored.
The GoldBod
The GoldBod policy is one of the flagship campaign promises of the government. Once in power, the John Dramani Mahama led government moved swiftly to kick the promise in motion with the appointment of Sammy Gyamfi, the rather vociferous Communications Officer of the National Democratic Congress, as the Chief Executive Officer of the Precious Minerals Marketing Commission (PMMC).
Following this, the Minister of Finance inaugurated a technical committee to design a regulatory framework for the full implementation of the GoldBod. According to the Minister of Finance the establishment of GoldBod is intended to curtail gold smuggling while providing the much-needed forex to boost Ghana’s economy.
In an interview with Bernad Avle’s Viewpoint on Wednesday, March 12 2025, Dr. Ato Forson opined that the initiative is expected to mop up 3 tonnes of gold weekly for export with the view to mobilizing 10 billion dollars within a financial year.
On his part, Sammy Gyamfi who leads the charge for the GoldBod and has been in sustained media engagements has reported that GoldBod intends to leverage government’s hold in all the value chain of small-scale mining from extraction to exportation. He noted that by being the sole body with the mandate to buy and sell gold from small scale miners, the GoldBod, which promises a ready market for gold aggregators, will the tame gold smuggling.
Challenges with the GoldBod policy
• GoldBod presents conflict between commercialization and regulation
The GoldBod policy exposes the government to a conflicted position. Rather than regulate a sector that is providing to affect the very foundations of our lives and livelihood, the policy rather commits the government into the business of small-scale mining. In the words of the lead campaigner of the GoldBod, Sammy Gyamfi, the GoldBod, which will among other things, provide excavators to small scale miners will reinforce the view that the government was their employer, hence restraining them from engaging in illegal mining activities. Whilst this imposes some moral obligations, morality cannot restrain people in search of gold or their livelihood. Not even has the law achieved much in restraining people’s urge to mine gold, however orthodox and unsustainable their approach may be. Again, the decision of the government to get into the extractive end of the gold mining value chain leaves it conflicted. Essentially the GoldBod makes the government both a referee and a player in a sector which is proving chaotic and unrestrained. In my opinion, regulation of the small-scale mining sector will be more laxed, as many politically exposed people venture into the business. Besides, as the government seeks commercial value from the sector, the balance of government involvement will be ticked in favour of commercialization rather than regulation.
• Gold board policy will intensify illegal mining.
One of the most obvious consequences of this policy is the tendency for it to intensify the rate and spate of illegal mining, what we commonly refer to as galamsey. The high clamor for the commodity because there is now an already market will naturally incentivize individuals to go all out in the pursuit of gold. Technically, small scale mining is synonymous with illegal mining as the regulatory mechanism for conducting small scale mining is essentially lagged, and lame in many instances. The sheer laxity and unwillingness in taming the politically exposed and business interests in small scale mining has led to the irrecoverable level of destruction that has been visited on our environment, forest and water bodies. This, unfortunately, will worsen as there is more incentive to get the gold, as the government makes $279 million available to purchase the commodity for onwards sales. Moreso the scrapping of the 1.5 % VAT on unprocessed gold from small scale mining sector provides more business cases for illegal mining activities.
• Politically exposed
From all indications, the GoldBod policy is politically exposed as it was fashioned out of a political manifesto promise. Indeed, the people who make up the committee setting up the board are essentially politically exposed people. This could bring into question their ability to be fair to their political opponents in the business and firm on their own political party individuals who are also involved in the small-scale gold mining value chain. Knowing how polarized some of these politically exposed policies could be, one would not be unfair to say that people within the ruling government will stand a better chance of benefiting than those outside the corridors of power. Again, the politically exposed nature of the policy could also mean that people who do not share the political view will be disposed to unfairly working against it.
• Discriminatory:
The policy is discriminatory as it focuses on gold purchases from small scale miners instead of their large-scale counterparts. To make discrimination even more pronounced the government’s decision to waive the 1.5% VAT on unprocessed gold from small scale miners discriminate against large scale miners who did not have such privilege. One wonders why the large-scale gold mining sector, which goes through rigorous regulatory checks, do not appear to enjoy some of these incentives. In our case, there are even attempts to charge an additional 1% VAT. Could this potentially create avenue for large scale miners to avoid paying some statutory taxes and levies in reprisal? Plausible.
Smuggling will not be curtailed
Proponents of the GoldBod have argued that the policy will curtail the high incidence of gold smuggling, as the government becomes the sole buyer and seller of the commodity. Some have equally reasoned that by removing the 1.5% VAT from unprocessed gold commodities the government was essentially making the industry lucrative, thereby disincentivizing smuggling. Even without fully-fledged empirical research one could question the basis for this argument on many fronts. It is noted that the GoldBod policy runs on the same business model as COCOABOD, where the government provides the inputs, incentivize farmers and decide how much to pay farmers for the commodity. The inability of government to pay the Ghanaian cocoa farmer amounts which are close to FOB prices have led to high incidence of smuggling, threatening the viability of the sector.
Unprofitability of the Cocoabod Model
The woes of Cocoabod are well documented. Currently, Cocoabod is said to be indebted to the tune of over 32 billion Ghana cedis. The Minister of Finance has said that Cocobod should find ways of paying the debts on their own balance sheet, as the government is unable to absorb those costs as would have happened in the past. According to the Ministry of Finance, Ghana Cocoa Board (COCOBOD), the largest loss-making SOE, recorded losses of GHS 2.4 billion in 2021 and GHS 3.8 billion in 2022.If Ghana, being one of the largest cocoa producers have not achieved much with how it modeled its cocoa sector, how is anyone convinced that the GoldBod will be profitable.
Recommendations
- The government should engage private gold tracking/monitoring companies to help track the gold value chain from gold production through to exportation to address the very challenges the board is to address. This will assure the government of its much-needed revenues from the gold industry.
- Government should focus on regulating small scale mining sector rather than commercializing same.
- A strong political will is required to rid the sector of politically exposed people who make regulation of the sector daunting.
- Incentivizing small scale miners at the expense of the large scale miners could pose create an avenue for tax avoidance and evasion at the large scale mining sector.
Conclusion
The real challenge of small-scale mining is well known. Regulations are lax, and there is a lack of political will. Additionally, effective value chain monitoring is missing. A lot is required to stem the tide in small scale mining front. The government should quickly partner with the private sector. They need to use technology to track small scale mining gold production. This is a better approach than seeking to compound the challenge with a GoldBod model.
Samuel Boateng Osarfo
Policy Analyst/Communications Researcher.