Minority hints at amendment of the Ghana Gold Board Act

The Minority in Parliament has signaled plans to pursue legislative reforms to the legal framework governing the Ghana Gold Board (GoldBod), citing structural inefficiencies and financial losses associated with the current operational model.

The move comes amid growing political and policy debate over the performance of the Gold-for-Reserves programme, a flagship initiative introduced by the Bank of Ghana in 2021 to strengthen the country’s foreign exchange reserves through domestic gold purchases.

The programme, which was initiated under the previous New Patriotic Party (NPP) administration, has been widely regarded as a strategic intervention aimed at reducing the dependence on foreign currencies while stabilising the cedi.

Over time, it evolved into a central pillar of the macroeconomic policy, particularly during periods of economic volatility.

However, recent concerns about its financial performance and operational structure have triggered calls for reform, especially following claims that the system may be incurring significant transactional losses.

Speaking during an engagement with the Ghana Employers Association on March 31, Kojo Oppong Nkrumah, Ranking Member on Parliament’s Economy and Development Committee, indicated that the Minority is considering introducing a Private Member’s Bill to amend the Ghana Gold Board Act.

According to him, the proposed amendment would seek to address structural weaknesses in the current framework and improve efficiency in the implementation of the gold reserve policy.

The Minority’s concerns are rooted in claims that under the current arrangement, approximately 15 percent of funds released by the Bank of Ghana for gold purchases are lost to various charges.

Specifically, it is alleged that for every $10 million disbursed to GoldBod, about $1.5 million is absorbed by costs such as handling, assaying, transactional expenses and dealer incentives, raising questions about value for money and sustainability.

Providing insight into the policy challenges, Kojo Oppong Nkrumah explained that one of the key structural flaws lies in the blurring of roles between regulation and trading within the Gold Board framework.

According to him, combining these functions creates inefficiencies and may lead to inappropriate allocation of resources.

“Don’t mix the role of the regulator with the role of the trader. Because if you do, you may end up funding regulatory functions in ways that you shouldn’t,” he cautioned.

He further revealed that the Minority had previously submitted several recommendations aimed at strengthening the policy, including clearer definitions of operational practices such as gold hoarding, which has implications for stakeholders like jewellers and traders within the gold value chain.

However, he indicated that many of these proposals were not incorporated into the final structure of the Gold Board.

“As part of regulatory functions, government is now having to pay bonuses to gold dealers to discourage smuggling,” he noted, explaining that such incentives, while  intended to retain gold within official channels, inevitably increase operational costs and contribute to the reported losses.

The Minority’s position reflects broader concerns about the sustainability of the programme, particularly in light of its growing financial burden.

Critics argue that while incentivising dealers may help curb illegal gold exports, the associated costs could undermine the long-term viability of the initiative if not properly managed.

Despite these concerns, Kojo Oppong Nkrumah indicated that the Minority remains open to stakeholder input as it considers possible legislative reforms.

He stated that if efforts to introduce amendments through a Private Member’s Bill do not succeed, the Minority would pursue broader reforms under a future NPP administration.

“If it is possible for us to come by a private member’s bill to get amendments, we will explore that. If we cannot do it now, we will make those corrections when we have the opportunity,” he said, adding that lessons learned from the implementation of the programme would inform future policy adjustments.

The Minority also emphasised the need to protect the interests of private sector players within the gold value chain, including logistics service providers and traders, who are directly affected by the current operational structure of GoldBod.

The debate over the Ghana Gold Board Act comes at a time when the Gold-for-Reserves programme is facing increasing scrutiny from both political actors and economic analysts.

While government officials maintain that the policy remains critical for managing the macroeconomic challenges, opposition figures argue that unresolved structural issues and cost inefficiencies must be addressed to ensure transparency, accountability and long-term success.