Ghana has enacted a prohibition, preventing foreigners from trading in its gold market to streamline its mining sector and enhance national revenues.
Ghana Enforces Ban on Foreigners in Gold Trading to Elevate National Revenue
Ghana Enforces Ban on Foreigners in Gold Trading to Elevate National Revenue
Ghana's new law prohibits foreigners from local gold market dealings as part of a wider economic strategy.
Ghana has introduced a ban on foreign participation in its local gold trading market, implemented through a recent law which empowers the newly established Ghana Gold Board (GoldBod) to oversee all gold-related transactions. The directive expects all foreign entities to exit this sector by April 30, 2025, marking a significant move towards consolidating control over the mining industry.
The country's efforts come in response to persistent issues stemming from illicit gold mining, locally referred to as "galamsey," which has exacerbated environmental degradation and economic hardships amid Ghana's status as Africa's largest gold producer and the sixth globally. The association of foreign nationals, particularly from China, with illegal mining practices has drawn criticism, prompting this decisive legislative action.
GoldBod is designated as the exclusive buyer and exporter of gold generated from artisanal and small-scale mining. While foreigners can petition for the ability to purchase or off-take gold directly from the board, their participation in local trade has been strictly curtailed, with existing dealer licenses revoked but subject to a transitional grace period allowing for adjustment before the restrictions are firmly enforced.
All gold trading will now be transacted in local currency, with prices aligned to the Bank of Ghana's rates to enhance market stability. There are heavy penalties for engaging with gold outside the new licensing framework. The government has allocated a significant $279 million to GoldBod to facilitate the purchase and export of at least three tonnes of gold weekly, aiming to bolster foreign exchange and stabilize the local economy.
Concerns have been raised regarding the government's capacity to purchase adequate amounts of gold under this regulation. Critical voices, like Kwaku Effah Asuahene, chairman of the Chamber of Bullion Traders Ghana, suggest that collaboration with foreign investors would have been a preferred approach.
The ban also aims to stifle illegal gold sales, as the country wrestles with widespread environmental harm, affecting over 60% of its water bodies due to unregulated mining activity. This legislative development is a key response from President Mahama's administration, reinforcing its commitment to combat illegal mining while enhancing regulatory oversight.
Experts believe that if implemented appropriately, this ban could significantly uplift government revenue while restoring order to an otherwise chaotic gold sector. Ghana's recent surge in gold exports—a considerable 53.2% increase to $11.64 billion last year—signals substantial economic potential within the sector, necessitating stringent regulations to maximize benefits.
The recent spike in gold prices, attributed to global trade tensions, further underscores the urgency of maintaining robust control within this economically pivotal industry for Ghana.
The country's efforts come in response to persistent issues stemming from illicit gold mining, locally referred to as "galamsey," which has exacerbated environmental degradation and economic hardships amid Ghana's status as Africa's largest gold producer and the sixth globally. The association of foreign nationals, particularly from China, with illegal mining practices has drawn criticism, prompting this decisive legislative action.
GoldBod is designated as the exclusive buyer and exporter of gold generated from artisanal and small-scale mining. While foreigners can petition for the ability to purchase or off-take gold directly from the board, their participation in local trade has been strictly curtailed, with existing dealer licenses revoked but subject to a transitional grace period allowing for adjustment before the restrictions are firmly enforced.
All gold trading will now be transacted in local currency, with prices aligned to the Bank of Ghana's rates to enhance market stability. There are heavy penalties for engaging with gold outside the new licensing framework. The government has allocated a significant $279 million to GoldBod to facilitate the purchase and export of at least three tonnes of gold weekly, aiming to bolster foreign exchange and stabilize the local economy.
Concerns have been raised regarding the government's capacity to purchase adequate amounts of gold under this regulation. Critical voices, like Kwaku Effah Asuahene, chairman of the Chamber of Bullion Traders Ghana, suggest that collaboration with foreign investors would have been a preferred approach.
The ban also aims to stifle illegal gold sales, as the country wrestles with widespread environmental harm, affecting over 60% of its water bodies due to unregulated mining activity. This legislative development is a key response from President Mahama's administration, reinforcing its commitment to combat illegal mining while enhancing regulatory oversight.
Experts believe that if implemented appropriately, this ban could significantly uplift government revenue while restoring order to an otherwise chaotic gold sector. Ghana's recent surge in gold exports—a considerable 53.2% increase to $11.64 billion last year—signals substantial economic potential within the sector, necessitating stringent regulations to maximize benefits.
The recent spike in gold prices, attributed to global trade tensions, further underscores the urgency of maintaining robust control within this economically pivotal industry for Ghana.
