Institute of Economic Affairs (IEA), has called on the government to scale up the mandatory gold sales requirement for large-scale mining firms from 30 percent to 50 percent once current market operations stabilize.
The recommendation forms part of a broader structural policy push by the governance think-tank for Ghana to move beyond the traditional royalty regime toward effective state ownership of natural resources, contracting mining companies to operate on behalf of the state while aggressively expanding local processing and value addition.
“We have been extremely consistent in calling on the government to move beyond the royalty regime to effective state ownership of natural resources, contracting mining firms to mine on behalf of the state and increase local processing and value addition. This would ensure that Ghana captures a significant larger share of resource revenue to support fiscal management for economic development and debt sustainability. Transition the Gold Board from a trader to a strategic asset manager.”
Prof. Alexander Bilson Darku, Director of Research
Prof. Darku explained that increasing domestic gold retention will enable Ghana to capture a significantly larger share of mineral revenues to strengthen fiscal management, support economic development, and enhance long-term debt sustainability.
He stressed that the Ghana Gold Board must transition from a basic commodity trader into a strategic asset manager, warning against speculative trading practices that expose public resources to market volatility.
Additionally, he urged authorities to resolve the $1.7 billion fiscal loss currently under public discussion by bringing it directly onto the government’s official books, while simultaneously breaking the structural interest rate transmission bottleneck to spur domestic credit expansion and sustainable economic growth.
Strategic Asset Management vs Speculative Trading
Prof. Darku noted that gold is a strategic asset not only to Ghana but to the entire global economy, meaning governing state institutions must not act merely as traders driven by market speculation.
He highlighted that Ghana’s Gold Board framework is one of the most significant institutional mechanisms ever created in Africa, offering a major opportunity for national leadership as peer economies across the continent cautiously observe Ghana’s macroeconomic experience to guide their own resource management strategies.
However, he cautioned that Ghana must learn from past global and domestic institutional failures where early promising boards suffered heavy losses due to price manipulation, opacity, and corruption, emphasizing that the Gold Board must maintain strict governance to avoid repeating those mistakes.
Macroeconomic Impact and Reserve Fortification
Scaling up the mandatory large-scale gold sales requirement from 30 percent to 50 percent will structurally transform Ghana’s macroeconomic indicators and balance of payments position.
By retaining half of all large-scale gold output for central bank reserves and domestic refineries, the Bank of Ghana and the Gold Board can build robust foreign exchange buffers.
This reserve accumulation directly mitigates exchange rate volatility, stabilizes the domestic currency, and reduces foreign exchange exposure during global market shocks.
Increased local refining further keeps substantial economic value within the country, generating tax revenues, building industrial skills, and fostering robust domestic supply chains.
Furthermore, direct state retention of mineral wealth reduces total sovereign reliance on expensive foreign commercial borrowing. Capturing a higher percentage of raw resource revenue provides sustainable non-debt financing for national capital expenditure and infrastructure development initiatives.
As national gold reserves grow, Ghana’s sovereign creditworthiness strengthens, reducing foreign borrowing spreads and creating a stable environment for long-term fiscal planning and public debt stabilization.
Fiscal Transparency and Interest Rate Transmission
Addressing the reported $1.7 billion fiscal loss by placing it explicitly on the government’s ledgers is vital for restored fiscal integrity and economic stability.
Prof. Darku maintained that full accounting transparency prevents hidden liabilities from distorting public debt metrics or eroding international investor trust.
Incorporating these losses directly onto official state balance sheets ensures comprehensive public debt auditing and establishes a reliable foundation for fiscal management.
Finally, resolving this fiscal exposure while solidifying the Gold Board’s strategic reserve posture will break the persistent interest rate transmission bottleneck in the domestic banking sector.
A de-risked sovereign balance sheet backed by tangible bullion assets allows central bank policy rate reductions to filter effectively into commercial bank lending rates.
Lowering high interest rates facilitates affordable credit access for local businesses, stimulating broad-based economic expansion across non-extractive sectors.
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