Ghana Implements Gold Trading Ban on Foreigners: Aiming for Economic Boost

The recent ban on foreign gold trading in Ghana is a strategic move to streamlining mining operations and combat illegal activities within the sector.

Ghana has officially prohibited all foreigners from participating in its local gold market as part of a broader strategy to increase national revenue and reform its mining industry. This new regulation follows the recent establishment of the Ghana Gold Board, commonly known as GoldBod, which now holds exclusive authority over gold mining activities.

"All foreigners are hereby notified to exit the local gold trading market not later than 30th April, 2025," announced GoldBod spokesperson Prince Kwame Minkah. Ghana stands as Africa's foremost gold producer and ranks sixth globally, yet the nation grapples with the challenge of rampant illegal gold mining, popularly referred to as "galamsey." Despite being the world's second-largest cocoa producer, the country struggles to maximize its earnings from its gold assets amidst a significant economic downturn and rising living costs.

The increase in gold prices and youth unemployment has seen illegal mining expand, leading to military interventions aimed at curbing the activities of galamsey operators. These issues were a highlighted concern during recent electoral campaigns.

Chinese nationals have previously played a substantial role in Ghana's informal mining sector and, along with local miners, have been criticized for their environmental disregard. Under the newly enacted legislation approved by President John Mahama on April 2, GoldBod will now act as the sole buyer, seller, and exporter of gold procured from the artisanal and small-scale mining sector.

Foreigners may still apply to acquire gold from GoldBod directly but will no longer have the ability to function within the local gold supply chain. Local dealers' licenses have also been revoked, although there will be a transition period to allow for an orderly adjustment to the new directives. During this interim period, all gold transactions are to be conducted in the local currency, the Ghana cedi, and will reflect the rates from the Bank of Ghana.

Violators of the new regulation face penalties for handling gold without proper authorization from GoldBod. The government has allocated $279 million to aid GoldBod in purchasing and exporting at least three tonnes of gold per week, aiming to boost foreign exchange inflows and stabilize the Ghanaian currency, as stated by Finance Minister Cassel Ato Forson.

Yet, concerns linger, particularly voiced by Kwaku Effah Asuahene, chair of the Chamber of Bullion Traders Ghana, who doubts the government's capacity to generate sufficient revenue to buy all gold available. Despite this, he expressed support for the initiative while advocating for a partnership approach with foreign investors in the gold export process.

Although the creation of GoldBod is not primarily aimed at addressing illegal mining, the ban could complicate operations for illegal miners seeking to sell gold. Ghana faces a pressing environmental crisis due to illegal mining, with over 60% of its water bodies severely impacted.

Industry experts view this ban as a crucial initial measure by President Mahama’s administration to exert greater oversight over the gold sector, fulfilling promises to combat galamsey. Nana Asante Krobea, a mining governance consultant, indicated that if implemented effectively, the new regulations could enhance government revenues and restore order within the sector. Last year, Ghana’s gold exports surged by 53.2% to $11.64 billion, with around $5 billion attributed to legal small-scale operations. The ongoing trade tensions between the United States and China have further inflated gold prices, reaching $3,200 per ounce last week, as market anxieties drive investors toward safe-haven commodities.