The GoldBod Policy: A Bane, Not a Gain – Policy Analyst [FEATURE]

In this article, the author assesses the impact of the current government’s flagship GoldBod policy and argues that the policy will intensify illegal mining and its related consequences, as it incentivizes a rather precarious sector. It is further argued that rather than engaging in small-scale mining from extraction to exportation, the government should engage private gold tracking companies to help track and monitor gold from the small-scale mining sector at all levels to ensure maximum value from the sector—yes, a sector that contributes 40% to Ghana’s total gold production. Because the small-scale mining sector remains informal and disorganized, Ghana tends to lose tax and royalty revenues from the sector as production and trading remain untracked and unmonitored.

The GoldBod Policy

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 implement the promise, appointing Sammy Gyamfi, the 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 GoldBod. According to the Minister of Finance, the establishment of GoldBod is intended to curtail gold smuggling while providing much-needed foreign exchange to boost Ghana’s economy.

In an interview with Bernard Avle’s Viewpoint on Wednesday, March 12, 2025, Dr. Ato Forson opined that the initiative is expected to mop up three tonnes of gold weekly for export, with the goal of mobilizing $10 billion within a financial year. On his part, Sammy Gyamfi, who leads the charge for GoldBod and has been in sustained media engagements, reported that GoldBod intends to leverage the government’s hold on all aspects of the small-scale mining value chain, from extraction to exportation. He noted that by being the sole body with the mandate to buy and sell gold from small-scale miners, GoldBod, which promises a ready market for gold aggregators, will tame gold smuggling.

Challenges with the GoldBod Policy

1. GoldBod Creates a Conflict Between Commercialization and Regulation

The GoldBod policy places the government in a conflicted position. Rather than regulating a sector that significantly affects the environment and livelihoods, the policy commits the government to the business of small-scale mining. According to Sammy Gyamfi, GoldBod, which will, among other things, provide excavators to small-scale miners, will reinforce the perception that the government is their employer, thereby discouraging illegal mining activities. However, morality alone cannot restrain people in search of gold or their livelihood.

Moreover, the government’s decision to engage in the extractive end of the gold mining value chain leaves it conflicted. Essentially, GoldBod makes the government both a referee and a player in a sector that is already chaotic and unregulated. In my opinion, regulation of the small-scale mining sector will become more lax as politically exposed individuals venture into the business. Furthermore, as the government seeks commercial value from the sector, its involvement is likely to prioritize commercialization over regulation.

2. GoldBod Will Intensify Illegal Mining

One of the most obvious consequences of this policy is its potential to intensify illegal mining, commonly referred to as galamsey. The high demand for gold due to a guaranteed market will naturally incentivize individuals to exploit resources aggressively. Technically, small-scale mining is synonymous with illegal mining, as regulatory mechanisms are weak and ineffective.

The lax enforcement of regulations and the influence of politically exposed individuals in small-scale mining have already resulted in irreversible environmental destruction, including the devastation of forests and water bodies. This situation will likely worsen as the government allocates $279 million to purchase gold for onward sale. Furthermore, the removal of the 1.5% VAT on unprocessed gold from the small-scale mining sector provides even greater incentives for illegal mining activities.

3. GoldBod Is Politically Exposed

The GoldBod policy is inherently political, as it stems from a campaign manifesto promise. The individuals setting up the board are politically exposed, which raises concerns about their ability to remain impartial when regulating political opponents involved in the business. Given Ghana’s highly polarized political landscape, it is reasonable to expect that those affiliated with the ruling party will benefit more than those outside the corridors of power.

Additionally, the politically exposed nature of the policy could lead to unfair resistance from political opponents, further complicating its implementation.

4. GoldBod Is Discriminatory

The policy is discriminatory as it focuses on gold purchases from small-scale miners while excluding their large-scale counterparts. This discrimination is further amplified by the government’s decision to waive the 1.5% VAT on unprocessed gold from small-scale miners while imposing additional levies on large-scale miners.

One wonders why the large-scale gold mining sector, which undergoes rigorous regulatory scrutiny, does not receive similar incentives. In contrast, there have been attempts to impose an additional 1% VAT on large-scale mining operations. Could this encourage large-scale miners to engage in tax avoidance or evasion? It is highly plausible.

5. Smuggling Will Not Be Curtailed

Proponents of GoldBod argue that it will curb gold smuggling by making the government the sole buyer and seller of the commodity. Additionally, they claim that removing the 1.5% VAT on unprocessed gold will make the industry more lucrative and disincentivize smuggling. However, even without comprehensive empirical research, one can question the validity of this argument.

GoldBod follows the same business model as COCOBOD, where the government provides inputs, incentivizes farmers, and determines prices. The government’s failure to offer competitive prices to cocoa farmers has led to widespread smuggling, threatening the viability of the cocoa sector.

6. The COCOBOD Model Is Unprofitable

The challenges facing COCOBOD are well documented. Currently, COCOBOD is reportedly indebted to the tune of over 32 billion Ghana cedis. The Minister of Finance has stated that COCOBOD must settle its debts independently, as the government can no longer absorb these costs. If Ghana, as one of the largest cocoa producers, has struggled with this model, how can we expect GoldBod to be profitable?

Recommendations

1. The government should engage private gold tracking and monitoring companies to oversee the gold value chain, from production to exportation, ensuring the sector’s full potential is realized.

2. Instead of commercializing small-scale mining, the government should focus on regulating the sector effectively.

3. Strong political will is required to eliminate politically exposed individuals who hinder regulation in the sector.

4. Incentivizing small-scale miners at the expense of large-scale miners could create avenues for tax avoidance and evasion within the large-scale mining sector.

Conclusion

The challenges associated with small-scale mining are well known. From weak regulation and political interference to ineffective value chain monitoring, significant efforts are needed to reform the sector. As a matter of urgency, the government should partner with the private sector to implement technology-driven tracking of small-scale gold production rather than compounding existing challenges with the GoldBod model.

BY: Samuel Boateng Osarfo
Policy Analyst/Communications Researcher