S&P Warns Ghana’s Gold Purchase Initiative Threatens Cocoa Sector Stability
Global ratings agency S&P has cautioned that Ghana’s gold purchasing initiative, aimed at formalising the artisanal mining sector and enhancing export earnings, could undermine the country’s agricultural sector—particularly cocoa farming.
The warning comes in the wake of the government’s intensified efforts to regulate the artisanal mining space through the Ghana Gold Board (GoldBod), which has been granted exclusive rights to buy, sell, assay, value, and export gold and other precious minerals.
According to S&P, while the initiative has led to a marked improvement in gold exports amid strong global prices, it may have unintended consequences for agriculture.
“The government’s initiative to purchase gold from artisanal miners is formalizing the trade and significantly boosting exports, particularly in the context of high gold prices. However, this has negative implications for the agricultural sector, especially cocoa farming,” S&P stated in a report assessing Ghana’s recent economic performance.
The concern stems from the increasing shift of labour and land resources from cocoa farming to artisanal mining, a trend which could depress cocoa production, a key foreign exchange earner and source of livelihood for millions of Ghanaians.
On the fiscal front, the agency highlighted that Ghana’s fiscal performance showed signs of improvement following a challenging 2024. While the fiscal deficit on a cash basis aligned with the revised budget, S&P pointed out that the accumulation of arrears to suppliers and contractors led to a wider deficit on a commitment basis—exceeding projections by 3.7 percentage points of GDP.
In a more positive development, the agency noted Ghana’s foreign exchange reserves are on a recovery path. “In 2024, the current account recorded its largest surplus on record, reaching $3.58 billion, or 4.4% of GDP,” it said, attributing the surplus to a stronger trade balance and higher remittance inflows.
