Background
Within three months of assuming office, the president of Ghana, H.E. John Mahama, has signed a new law which establishes a state entity, the Ghana Gold Board (Goldbod), as the sole authority with the right to trade, add value to, and export gold. This mandate applies specifically to gold extracted by the artisanal and small-scale mining (ASM) sector.
The nations’s new leadership believes that dominating the post-mining upstream gold sector is necessary to streamline and maximize national benefits from the nation’s gold industry. The speed at which the government passed this new legislation reveals the pivotal role the gold industry plays in the administration’s agenda of currency stabilization and foreign reserves accumulation, among other objectives.
Before the passage of the Ghana Goldbod Act (1140), 2025, the local gold supply chain was dominated by private businesses—bullion traders and exporters, licensed by the state. On the surface, the supply flow of gold from the local mine to the foreign buyer does not appear to have changed much, especially since the Goldbod is to carry out its mandates through licensed private entities.
A closer look would reveal that the gold supply structure introduced by the Goldbod is markedly different. This write-up explores some key changes occasioned by the introduction of the Ghana Goldbod, and its far-reaching implications on relevant stakeholders and the industry. Let us first examine what the local supply chain looked like before the Ghana Gold board Act was introduced.
Pre-Goldbod Supply Flow
Gold sourced from small-scale mines is procured mainly by local gold traders (wholesalers) who set up gold trading hubs close to gold mining sites to buy gold directly from miners as often as possible. Gold nuggets are smelted at trading hubs for easier assaying, valuing, and transporting. These local wholesalers accumulate gold from different miners and retail it to retail traders who frequent these mining areas to procure gold doré.
Wholesalers
Retailers who establish direct contact with miners are able to procure gold at better rates. The disadvantage of going the direct route is that the miners may not have the quantities a retailer may require. The advantage of dealing with wholesalers is that wholesalers usually have larger quantities since they aggregate gold from different miners. Some wholesalers release their wares accumulated throughout the week only on Tuesdays. Tuesdays are an unofficial market day for gold buying across gold mining hubs.
Retailers
Local gold retailers transport doré to the regional capitals, or bigger gold trading hubs like Kumasi and Accra, where they retail their gold, often at a markup of between 0.2% and 0.7%. Sometimes, the same entity that sets up a trading hub in a mining area would also transport doré to the trade hubs to trade. Such a business set up is more profitable since it by-passes the middleman and sells doré for a bigger profit in the metropolis than in the mining area. Typical clients of gold retailers are licensed gold exporters and foreigners engaged in international gold trade.
Foreigners make up a larger percentage of this demographic. Given the high-risk nature of international gold trading, foreign buyers choose to travel to Ghana and procure gold doré in person, after which they engage the services of a licensed gold exporter to handle the export process to their home country. Over time, these foreigners establish trust with gold traders or exporters. Once they establish relationships with local parties, they can afford to return home and let their local partners handle the procurement and logistics on an ongoing basis.
Exporters
Licensed gold exporters do not engage in local gold trade unless they have a gold trading license as well. The mandate of an export licence is to purchase locally and sell to buyers abroad, as well as arrange the logistics involved, specifically, the shipping of gold to the foreign buyer. A foreign buyer in Ghana would require the services of an exporter to ship the gold home. A local retailer who has secured the trust of a foreign off-taker to supply doré would also require export services.
A buyer would require gold to be assayed, weighed, and valued. Exporters also offer these services to determine the purchase price and record accurate details for export declaration. The national assayer, the Precious Minerals Marketing Company (PMMC), would do another assay before export to confirm the records provided by the exporter. This would also help determine the proper export tax due, since export tax is calculated as a percentage of the value of doré being exported. The export tax was adjusted downwards from 3% to 1.5% in 2022. It remained at this level till the establishment of the Ghana Goldbod.
Foreign Off-takers
A bulk of the gold extracted locally is exported—over 95%. The international gold market is so competitive that many foreign off-takers are willing to pre-finance the procurement of gold. There are two things a pre-financing off-taker needs to establish before entering into such an arrangement. One is trust. Second is capacity. Many exporters may meet the criterion of trust, but are unable to prove capacity. And so, a third type of gold trader needed to arise to help exporters fill this gap. This led to the advent of gold aggregators.
Aggregators
Aggregators operate with the same licence as retailers and wholesalers —the PMMC-issued gold trader licence. Aggregators operate at another level of wholesale trading between the retailer and the exporter. Sophisticated and connected businessmen and businesswomen who saw the opportunity quickly took advantage of it, while some retailers and wholesalers upgraded their establishments to meet the standard.
Some aggregators find foreign off-takers by themselves and engage licensed exporters to handle the export-related side of the business. The most important marker of capacity is the ability to regularly supply the required quantities of gold. Many off-takers are glad to work with an aggregator as long as they can deliver, often overlooking English or computer literacy, as long as they can deliver goods and demonstrate trust.
Major-league foreign off-takers able to front millions of United States Dollars per transaction sometimes look out for certain markers to confirm capacity or trust. Many of them look out for these characteristics to screen for potential fraudsters. Basic command of the English language—enough for coherent email correspondence, a decent office space, company registration, a bank account, basic computer skills for preparing invoices, receipts, and ancillary documents and reports, for example. Some would first test with a couple of small orders before committing.
The one who controls the money controls the game. Never mind that the money came from overseas. Aggregators and exporters were the ones who controlled the money on the local market, so influence gravitated towards them. Aggregators and exporters often pre-financed miners, wholesalers and retailers so they could secure ample gold suppliers. Often, such pre-financing came with conditions of selling to the financier at a discount.
Political Influence
As time passed, politically active persons entered the industry, mostly as exporters and aggregators. Soon, there was an influx of mining leases granted by the state regulator for the mining sector—the Minerals Commission. These politically active persons wanted to own the lands themselves, expand on the mining activities they funded and expand their supply capacities. Their influence grew so much that these individuals monopolized the gold supply sector under the guise of a state monopoly, using the nation’s central bank as a front. Such persons used their political influence even to change laws to suit their business interests to the detriment of the environment and the public purse.
