Foreigners Banned From Ghana’s Internal Gold Market

Ghana is moving to expel foreigners from its local gold trading market by the end of the month to simplify gold purchases from small-scale miners, boost revenue, curb smuggling, and boost the enforcement of environmental regulations, Reuters reported. 

The move by Africa’s leading gold producer follows the passage of a new law earlier this month that gave exclusive authority over gold mining to the Ghana Gold Board (GoldBod), according to the BBC.  

For years, the West African country has struggled to contain illegal gold mining, known locally as “galamsey.” With this new system, it hopes to eliminate a channel that has allowed licensed local and foreign companies to buy and export gold directly from artisanal and small-scale miners. Starting in May, GoldBod will be the only entity allowed to buy, sell, assay, and export artisanal gold. 

Still, foreign entities will be allowed to buy gold directly from GoldBod.  

Part of the impetus for the new rules is that the mineral-rich country has been grappling with high inflation and unemployment, and currency instability. Officials hope the new system will provide a remedy.  

Meanwhile, Ghana has also been struggling with environmental pollution caused by illegal mining. The new system is considered the first concrete step by the new administration of President John Mahama to bring that under control. 

“It sends a strong message to foreign actors – especially Chinese operatives – who have circumvented local laws for years,” Nana Asante Krobea, a mining governance consultant, told Agence France-Presse. “If properly applied, the new law could bolster government revenue and bring some order to the chaos in the gold sector.”  

Gold prices last week were up to over $3,200 per ounce. The ongoing trade war between the US and China has generated uncertainty and shaken global markets, pushing investors toward gold, traditionally considered a financial refuge during times of economic and geopolitical turmoil.