Ghana is intensifying reforms in its gold sector as the country prepares for a critical international review of its anti-money laundering (AML) regime, a development with broad implications for its economy and the global gold market.
Importance of Gold Sector to Ghana’s Economy
Ghana’s gold industry is a cornerstone of its economy, accounting for 64% of total exports in the first half of 2025 and contributing approximately 7% to the national GDP. The sector comprises large-scale mining operations, artisanal and small-scale mining (ASM), and a complex supply chain that includes both licensed and informal players. Gold exports are a significant source of foreign exchange for the country, crucial for stabilizing the local currency and supporting economic growth.
Rising Concerns and Need for Reform
Despite its economic importance, Ghana’s gold sector faces major challenges related to illicit financial flows, illegal mining (galamsey), smuggling, and weak regulatory oversight. A SwissAid report revealed that over 229 tonnes of gold valued at $11.4 billion were illicitly exported from Ghana between 2019 and 2023, with 60 tonnes smuggled out in 2022 alone, making Ghana the second-largest source of smuggled gold in Africa after Mali. These illegal activities not only deprive the government of revenue but also pose serious environmental and socio-economic risks, including pollution of over 60% of Ghana’s water bodies.
At the same time, financial scandals related to corruption and inadequate transparency have increased scrutiny by international bodies like the Financial Action Task Force (FATF) and the Intergovernmental Action Group against Money Laundering in West Africa (GIABA).
Government’s Strategic Response
In response, the Ghanaian government has launched a series of reforms aimed at tightening oversight, enhancing traceability, and ensuring regulatory compliance within the gold industry ahead of its second AML/Combating the Financing of Terrorism (AML/CFT) mutual evaluation by GIABA.
One of the landmark reforms includes the enactment of the Ghana Gold Board Act, 2025, which established the Ghana Gold Board (GOLDBOD) — a new regulatory and commercial entity set to replace the former Precious Minerals Marketing Company. The Ghana Gold Board has a broad mandate to oversee the buying, selling, assaying, refining, and exportation of gold, while promoting responsible sourcing and accumulating gold reserves for the Bank of Ghana.
GOLDBOD aims to centralize gold trading activities and ensure that all gold sold domestically goes through a legal and traceable system. This reform also stipulates that all gold transactions within the country must be conducted in Ghanaian cedis, underscoring efforts to maximize foreign exchange earnings for the country.
Additionally, licensing requirements have been tightened, and companies involved in gold trading now must undergo rigorous Know Your Customer (KYC) and due diligence checks in collaboration with the Bank of Ghana and the Financial Intelligence Centre. This initiative is part of broader steps to align Ghana’s gold sector with international AML/CFT standards.
Efforts to Curb Smuggling and Illicit Mining
GOLDBOD has rolled out a nationwide gold aggregation system to streamline ASM gold collection and enhance traceability, which officials describe as a “game-changer.” This system is designed to mop up most of the ASM gold produced, reducing commercial opportunities for smugglers and illegal miners.
The government has also banned foreigners from engaging in local gold trading unless they purchase gold directly from GOLDBOD, aiming to clamp down on illicit gold flows and smuggling. Local dealers have been given a grace period to comply with the new regulations, and licensing without proper authorization is now considered an offense.
Through these efforts, the government hopes to restore investor confidence, improve revenue mobilization, stimulate job creation in the formal gold sector, and encourage partnerships between small-scale miners and formal financial institutions, including refiners and exporters.
Challenges and Outlook
While the reforms offer a promising pathway to curb illicit financial flows and bolster Ghana’s economic benefits from its gold resources, they also present significant governance and operational challenges. GOLDBOD’s wide-ranging roles as regulator, commercial operator, quality assurer, and anti-smuggling enforcer create tensions that require careful management to avoid inefficiencies and conflicts of interest.
Moreover, the large informal artisanal mining sector, which constitutes up to 80% unlicensed operations, remains a critical area requiring continued attention. Foreign nationals and political elites have been implicated in exacerbating illegal mining and environmental harm through activities that often evade official oversight.
Despite these hurdles, Ghana’s gold production is projected to increase by about 6.25% to approximately 5.1 million ounces in 2025, driven largely by small-scale mining and government reforms. The abolition of withholding tax on domestic gold purchases has significantly curtailed smuggling, boosting production and mid-term prospects for the sector.
Conclusion
Ghana is undertaking a comprehensive and unprecedented transformation of its gold sector through legislative, regulatory, and operational reforms to address mounting risks related to money laundering, smuggling, and environmental degradation. The country’s success in these reforms will be critical as it prepares for upcoming international AML reviews, which will assess its compliance with global standards.
AML Editor’s article was originally published in modernghana on 27 AUG 2025