The Vice-President of IMANI Centre for Policy and Education and a renowned Policy Analyst, Mr. Bright Simons, has accused the Ghana Gold Board (GoldBod) of orchestrating a regulatory environment that favors a single entity in the Domestic Gold Purchase Programme (DGPP).
Bright Simons alleged that the current administrative framework was deliberately tailored to ensure Bawa Rock Company Limited emerged as the sole aggregator for artisanal gold, effectively dismantling the competitive landscape of Ghana’s extractive sector.
This monopoly, he argued, has not only sidelined established buying agents but has also exposed the national economy to unprecedented systemic risks and financial opacity.
“There was NO open RFP process for the licensing that led to Bawa Rock alone emerging as the sole aggregator. Without the standard RFP process, the process lacks transparency and structure. It appears that conditions were created to ensure that only it could satisfy the requirement.”
Mr. Bright Simons
The controversy centered on the absence of a standard Request for Proposals (RFP) process, which Simons claims has stripped the licensing procedure of necessary transparency and structure.
Further complicating the matter are the staggering financial requirements associated with the role; a GHS 2 billion guarantee is mandated, a figure that exceeds the individual equity of even the most capitalized domestic banks, such as GCB.
By setting benchmarks that only a state-backed or uniquely positioned entity could ostensibly meet, GoldBod is accused of creating a “single point of failure” that places over GHS 100 billion of interest-free public funds under the control of a solitary private firm.
Financial Engineering and Monopoly Concentration Risks
The concentration of 90% of local gold trading into the hands of a “super-aggregator” has sparked fears of a massive systemic vulnerability. Experts in the extractive industry warn that such a bottleneck makes the DGPP overly dependent on Bank of Ghana (BoG) funding while shielding the preferred aggregator from the market realities faced by its competitors.
Bright Simons pointed out the “circular logic” of the current insurance bonds used to back these transactions, noting that the domestic insurance sector is too thinly capitalized to underwrite tens of billions of GHS in risk without undisclosed state backstopping.
This lack of due process in selecting aggregators risks hampering the long-term viability of the DGPP by eroding investor confidence and market integrity. When the selection criteria remain opaque, the programme’s ability to build resilient national reserves is compromised by political and commercial interests.
Strengthening the initiative requires an urgent shift toward “deep participation of the commercial banks” and the introduction of a digital public infrastructure that allows for open bids and asks, ensuring that price discovery is driven by the market rather than administrative fiat.
The Call for Structural Reforms and Transparency
To salvage the integrity of the gold trading remit, Simons proposes a rigorous three-stage reform process. The first stage demands an immediate “special assurance exercise” to audit the stock of gold-program losses, as current routine audits fail to recognize trading net proceeds on GoldBod’s books.
Critics argue that the current “mark-to-market” rules used in BoG accounts allow for the “obscuration” of real losses, which the IMF recently estimated at $214 million.
A public risk management ledger and a deviation tracker for loss drivers are seen as essential tools to restore institutional trust.
The final phases of the proposed reform aim to level the playing field for all off-takers and aggregators. By transitioning GoldBod’s role to the management of a national Gold Trading Trust-Chain Network (GTTNet), the state can eliminate the flow of interest-free cash to privileged insiders.
This evolution would require an escrow management system operated across commercial banks, ensuring that “competitive USD to GHS rates” track the actual market. Such reforms would essentially transfer price risk from the central bank’s books to market participants, insulating the state from global price corrections.
Building Resilience Before the Market Corrects
As global gold prices remain volatile, the urgency of these reforms cannot be overstated. The current “papering over” of risks may sustain the programme during price surges, but the lack of a competitive “liquidity pool” leaves the DGPP defenseless against a sharp market downturn.
By adopting Simons’ recommendations for transparency and competitive bidding, Ghana can transform the DGPP from a controversial monopoly into a robust, market-driven sovereign reserve-building tool.
Implementing these changes would ensure that “the miner and any useful intermediary” receive the true value of their labor based on global reality rather than arbitrary bonuses. Ultimately, the goal is to build a “nest before the rains come” by fostering an extractive environment where transparency is not an afterthought but the foundation of national resource management.
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