By Elizabeth Larkwor Baah
Tema, July 04, GNA – Dr Daniel Osabutey, a Senior Lecturer at the Business School of Accra Technical University, has cautioned that weak governance and institutional inefficiencies could undermine the Ghana Gold Board’s policy requiring large-scale mining companies to sell 30 per cent of their gold output to the state.
Dr Osabutey, who is also a financial expert, stated that while the policy has the potential to strengthen Ghana’s economy, its success will largely depend on transparency, financial discipline, and effective institutional management.
The government’s policy requires large-scale mining companies to sell 30 per cent of their gold production to GoldBod as part of their gold production to GoldBod as part of efforts to strengthen the country’s foreign reserves, support macroeconomic stability and increase the value Ghana derives from its mineral resources.
Dr Osabutey described the initiative as one of the most significant changes to Ghana’s mineral resource policy in recent decades, noting that it sought to transform the country’s gold wealth into a strategic national asset rather than continue exporting most of its gold with limited domestic benefits.
He said directing part of Ghan’s gold production into the Bank of Ghana’s reserve portfolio could gradually strengthen the country’s foreign reserves, improve investor confidence, enhance Ghana’s external credit profile and provide a buffer against global economic shocks.
“Ultimately, this policy is about more than gold; it is a test of whether Ghana can transform its natural resource wealth into lasting economic resilience rather than continue exporting raw minerals while importing economic vulnerability,” he stated.
The financial expert also said the policy could encourage local value addition by creating sustained demand for gold refining within the country, explaining that increased refining capacity could attract investment, create skilled employment opportunities and support Ghana’s ambition of becoming a regional gold refining hub.
He further noted that conducting gold transactions in Ghana cedis could reduce immediate demand for foreign currency and ease pressure on the foreign exchange market if accompanied by sound fiscal and monetary policies.
Dr Osabutey mentioned governance as a critical factor that could determine whether the policy achieves its intended objectives and warned that weak governance, poor institutional performance and ineffective management of GoldBod’s operations could erode public confidence in the initiative.
He stressed that operational efficiency would be required across the entire gold purchasing process, including procurement, transportation, refining, quality assurance and reserve management.
He also identified financing as a major challenge facing the policy, explaining that purchasing 30 per cent of Ghana’s gold output would require substantial and reliable liquidity, saying that delays in payments to mining companies could disrupt their operations, affect production and weaken investor confidence.
He added that although the agreed 0.55 per cent discount on gold purchases appears commercially reasonable, mandatory domestic sales could raise concerns among investors about commercial flexibility.
To safeguard the policy’s long-term success, Dr Osabutey called for GoldBod to operate under high standards of corporate governance supported by independent audits, transparent reporting and strong institutional oversight and also recommended continuous engagement with mining companies, alongside investment in refining infrastructure, technical expertise and logistics to maximise value addition within Ghana.
According to him, the ultimate success of the policy should not be measured only by the volume of gold accumulated in the Bank of Ghana’s reserves but also by its contribution to a stronger economy, a more stable cedi, increased industrial capacity, improved investor confidence and better living standards for Ghanaians.
GNA
Edited by Laudia Anyorkor Nunoo/Kenneth Odeng Adade
Reporter: Elizabeth Larkwor Baah
elizabeth.baah.gna.org.gh