The Ghana Gold Board (GoldBod) is preparing to move towards a self-financing system that will reduce its reliance on the Bank of Ghana (BoG) to fund its gold purchasing operations.
GoldBod Chief Executive Officer Sammy Gyamfi said the new framework, established under the GoldBod Act, gives the state-owned institution the authority to raise funds directly from the financial market to support its activities.
He explained that GoldBod will increasingly work with commercial banks and gold offtakers to mobilise the liquidity required to purchase, aggregate and trade gold.
“This new GoldBod model, as envisioned under the GoldBod Act, is not anchored on Bank of Ghana financing GoldBod. GoldBod has been given the powers under Section 18 of the GoldBod Act by Parliament to raise money for itself from the financial market,” Gyamfi said.
The new arrangement marks a shift from the previous financing model, under which the Bank of Ghana played a significant role in funding activities associated with the government’s Domestic Gold Purchase Programme.
Gyamfi said the end of that financing arrangement should not be interpreted as evidence that GoldBod had been operating improperly.
Instead, he said the institution is expected to build stronger relationships with commercial banks and local and international gold buyers to secure the capital needed to carry out its mandate.
Under the proposed structure, commercial banks would provide short- and medium-term financing for gold purchases, while offtakers could also provide funding through arrangements tied to the purchase and export of gold.
The model is expected to operate as a revolving financing cycle. GoldBod would use the funds raised to purchase and aggregate gold, sell the gold to approved offtakers and use the proceeds to support further purchases.
Gyamfi said this approach should make GoldBod more commercially sustainable while reducing its dependence on the central bank’s balance sheet.
The Bank of Ghana remained involved in financing arrangements linked to the government’s domestic gold purchase programme until March this year. Under the new structure, responsibility for mobilising funds will increasingly rest with GoldBod itself.
Gyamfi said understanding this distinction is important when assessing the financing structure provided under the GoldBod Act.
He also expects the new model to encourage greater participation by commercial banks in the gold sector, particularly in financing transactions involving licensed producers and aggregators.
GoldBod is responsible for purchasing, aggregating and trading gold produced in Ghana, including gold from the small-scale mining sector. Its expanded mandate is intended to strengthen Ghana’s control over the gold trade, improve traceability and retain more of the value generated by the industry within the formal economy.
Gyamfi said the success of the self-financing model will depend heavily on GoldBod’s ability to attract funding from financial institutions and establish reliable offtake arrangements.
He added that the structure could give the institution greater flexibility to respond to changes in international gold prices and market demand, with financing more closely linked to its commercial activities and cash flows rather than direct government funding or the Bank of Ghana’s balance sheet.
