$214m BoG Loss: GoldBod Price Incentives key to Market Penetration Despite Cost Implications – Dr Manteaw
Co-Chair of the Ghana Extractive Industries Transparency Initiative (GHEITI), Dr Steve Manteaw, has defended the pricing strategy adopted by the Gold Board (GoldBod), arguing that the provision of higher guaranteed prices was a necessary cost to break entrenched foreign dominance in Ghana’s gold trading market, even as the Bank of Ghana (BoG) recorded a reported $214 million loss on gold purchase transactions.
Commenting on the International Monetary Fund’s (IMF) report on the losses incurred by the BoG under its gold purchase arrangements, Dr Manteaw explained that GoldBod’s entry into the market required an incentive-driven approach to displace long-standing relationships between Ghanaian miners and foreign gold buyers.
“Before Gold Board entered the market, there were established relationships between gold buyers, most of whom are foreigners, and the Ghanaian gold miners. In fact, a lot of the miners were being pre-financed by these foreigners in exchange for the gold,” he said.
According to him, gold was typically traded at a 1–2 per cent discount to international prices prior to GoldBod’s entry, making it impossible for the state-backed entity to compete on the same terms. To gain market share, GoldBod opted to purchase gold at prevailing international prices, effectively outbidding foreign buyers.
“That is a way to out-bid the foreigners. But that comes at a cost. And the cost is your operational cost, which the Bank of Ghana decided to absorb because Gold Board was not trading on its own. It was trading as an agent for the Bank of Ghana in building up reserves for the country,” Dr Manteaw noted.
A shift from force to incentives
Beyond pricing, Dr Manteaw described GoldBod as a “game-changer” in Ghana’s long-running struggle against illegal mining and gold smuggling, saying previous enforcement-heavy approaches had failed to deliver lasting results.
“Previous attempts at stemming illegal mining in this country have been to resort to brute force. These have not worked. When you use force, you drive the business underground,” he said.
He cited the 2018–2019 moratorium on small-scale mining as evidence of the limits of force-based enforcement, noting that Ghana paradoxically recorded its highest gold export volumes during the ban.
“So ask yourself, who were mining?” he questioned.
In his view, GoldBod’s model—combining compliance enforcement with financial incentives—offers a more sustainable pathway. “It combines compliance enforcement with incentives, which is a way for Ghana to go,” he added.
Tackling smuggling and forex losses
Dr Manteaw stressed that GoldBod was established primarily to address pervasive smuggling in the gold sector and ensure Ghana captures the full economic benefits of its gold exports.
“GoldBod was set up to address the problem of smuggling in the gold sector so that Ghana can reap the full benefits of its gold exports,” he said.
He pointed to the Gold Board Act, 2025 (Act 1140), which mandates the institution to implement a traceability system that tracks gold from the mine to the market, in line with OECD and Financial Action Task Force (FATF) guidelines. The objective, he said, is to prevent illicit gold from entering the formal supply chain.
Dr Manteaw described the situation inherited by GoldBod as one of “massive smuggling,” with the gold trade historically dominated by foreign actors who repatriated profits abroad.
“The sector in terms of gold trade was dominated by foreigners who would repatriate the benefits of the trade back to their home countries, depriving Ghana of the badly needed forex to shore up our local currency,” he said.
While acknowledging the financial costs associated with GoldBod’s market entry, Dr Manteaw maintained that the broader objectives—curbing smuggling, formalising the sector and strengthening Ghana’s foreign exchange position—justify the strategy, even as questions persist over the reported losses incurred by the central bank.
