Ghana, known as Africa's largest gold producer, has enacted new legislation preventing foreigners from engaging in local gold markets to bolster national revenue and combat illegal mining practices.
**Ghana's New Regulation Bars Foreigners from Gold Trading to Improve Local Economy**
**Ghana's New Regulation Bars Foreigners from Gold Trading to Improve Local Economy**
Ghana implements a ban on foreign participation in its gold trading sector, aiming to enhance national revenue amidst economic challenges.
In a landmark step, Ghana has officially banned foreigners from trading in its local gold market, a move designed to boost the nation’s economic standing amid ongoing challenges. This new regulation forms part of a broader strategy initiated under a recent law that empowers the Ghana Gold Board (GoldBod) with exclusive rights over gold mining activities in the country.
The announcement was made by GoldBod spokesperson Prince Kwame Minkah, who stated, "All foreigners are hereby notified to exit the local gold trading market not later than 30th April 2025." This directive follows Ghana's ongoing efforts to control rampant illegal mining - referred to locally as "galamsey" - which has been a critical concern in addressing both revenue generation and environmental degradation.
Ghana, while being Africa's top gold producer and the sixth largest in the world, has faced economic difficulties, including a high cost of living and minimal returns from its cocoa industry, despite being the second-largest cocoa producer globally. The informal mining sector, particularly influenced by the influx of foreign nationals, has been at the heart of rising illegal operations, which have surged despite military crackdowns.
Under this new legislation, GoldBod emerges not just as a regulatory body but also takes on the role of primary buyer and seller for gold from artisanal and small-scale mining, effectively removing foreign players from the local trading chain. While foreigners can still apply to engage in selling gold directly from GoldBod, they will no longer have a direct presence in the local value chain.
As part of the transition, local gold dealers have been given a grace period, but their licenses have also been revoked. Transactions must now occur in Ghana's local currency, the cedi, aligned with the Bank of Ghana's rates. To enforce compliance, strenuous measures have been put in place, making unauthorized gold transactions a punishable offense.
The government has allocated substantial funding of $279 million to support GoldBod in purchasing an expected three tonnes of gold each week, aiming to stabilize the local currency and boost foreign exchange. However, there are reservations among local traders regarding the government's capability to procure the needed gold volumes without foreign partnerships.
Environmental pollution resulting from illegal mining has profoundly impacted Ghana, with over 60% of the nation's water bodies compromised. Experts believe that the new regulations might not only fortify government revenue but also enhance order in the chaotic gold sector.
The implementation of these regulations represents a significant initiative by President John Mahama's administration in its commitment to regulate gold mining and tackle illegal practices head-on. Analysts perceive this move as a clear signal to foreign entities, particularly those from China, who have previously skirted local laws. Proper enforcement of these regulations is anticipated to address the gold sector's challenges while potentially elevating the nation’s financial wellbeing.
The announcement was made by GoldBod spokesperson Prince Kwame Minkah, who stated, "All foreigners are hereby notified to exit the local gold trading market not later than 30th April 2025." This directive follows Ghana's ongoing efforts to control rampant illegal mining - referred to locally as "galamsey" - which has been a critical concern in addressing both revenue generation and environmental degradation.
Ghana, while being Africa's top gold producer and the sixth largest in the world, has faced economic difficulties, including a high cost of living and minimal returns from its cocoa industry, despite being the second-largest cocoa producer globally. The informal mining sector, particularly influenced by the influx of foreign nationals, has been at the heart of rising illegal operations, which have surged despite military crackdowns.
Under this new legislation, GoldBod emerges not just as a regulatory body but also takes on the role of primary buyer and seller for gold from artisanal and small-scale mining, effectively removing foreign players from the local trading chain. While foreigners can still apply to engage in selling gold directly from GoldBod, they will no longer have a direct presence in the local value chain.
As part of the transition, local gold dealers have been given a grace period, but their licenses have also been revoked. Transactions must now occur in Ghana's local currency, the cedi, aligned with the Bank of Ghana's rates. To enforce compliance, strenuous measures have been put in place, making unauthorized gold transactions a punishable offense.
The government has allocated substantial funding of $279 million to support GoldBod in purchasing an expected three tonnes of gold each week, aiming to stabilize the local currency and boost foreign exchange. However, there are reservations among local traders regarding the government's capability to procure the needed gold volumes without foreign partnerships.
Environmental pollution resulting from illegal mining has profoundly impacted Ghana, with over 60% of the nation's water bodies compromised. Experts believe that the new regulations might not only fortify government revenue but also enhance order in the chaotic gold sector.
The implementation of these regulations represents a significant initiative by President John Mahama's administration in its commitment to regulate gold mining and tackle illegal practices head-on. Analysts perceive this move as a clear signal to foreign entities, particularly those from China, who have previously skirted local laws. Proper enforcement of these regulations is anticipated to address the gold sector's challenges while potentially elevating the nation’s financial wellbeing.
