Ghanaian authorities are pushing large-scale gold miners to increase their annual output contribution to the central bank’s reserves from 20% to 30%, a move aimed at bolstering national gold stockpiles amidst a global trend of central banks increasing bullion holdings. The proposal, part of a revamped reserve-building drive initiated in 2022, faces ongoing negotiations with miners over key commercial terms, including pricing and discounts.
Context of Reserve Building
Central banks worldwide are actively accumulating gold as its appeal as a stable reserve asset grows, particularly in an environment of rising prices and economic uncertainty. Ghana, Africa’s leading gold producer, launched its own bullion purchase program in 2022. This initiative initially secured an agreement with major mining companies, facilitated by the Ghana Chamber of Mines, to supply 20% of their annual production to the Bank of Ghana.
The program has shown tangible results. Gold reserves held by the Bank of Ghana reached 19.2 metric tons by February 2024. This increase has been instrumental in stabilizing the Ghanaian cedi and strengthening the nation’s external buffers, contributing to the ongoing economic recovery from a severe crisis.
Revamped Program and Increased Targets
The government officially revamped the reserve program in February, setting an ambitious target to accumulate up to 157 tons of gold by 2028. This quantity is equivalent to approximately 15 months of import cover, highlighting the strategic importance of gold to Ghana’s financial stability.
Paul Bleboo, head of the central bank’s Gold Management Programme, confirmed the government’s intention to negotiate for a higher contribution. “This time, we intend to negotiate for 30% of annual production [from industrial miners] … with the entire 30% to be delivered in dore form,” Bleboo stated. Dore is a semi-pure alloy of gold, typically containing 80-90% gold, which is then sent for further refining.
Challenges in Implementation
Despite the government’s directive, the actual delivery of gold by industrial miners has fallen short of the initial 20% commitment. Last year, miners delivered approximately 10 tons against a declared production of about 100 tons, representing about 10% of output. Bleboo attributed this shortfall to ongoing negotiations and unresolved commercial terms.
The central bank’s objectives extend beyond simply increasing reserve volume. It also aims to enhance the traceability of gold. To achieve this, the state gold trader, GoldCorp, is designated as the mandatory intermediary for all gold exports. For companies that export directly, the central bank requires 30% of these shipments to be retained in dore form to better track volumes and allocations.
Miner Concerns and Disagreements
The Ghana Chamber of Mines and individual mining executives have raised significant concerns regarding the proposed increase and the associated commercial terms. Kenneth Ashigbey, CEO of the Ghana Chamber of Mines, indicated that discussions on pricing and discounts are complex and no agreement has been reached. “Discussions on pricing and discounts are not straightforward and no agreement has been reached,” he stated.
Miner representatives are reportedly opposing proposed volume-based discounts and the zero valuation of byproducts such as silver. Furthermore, a proposed discount of under 1% on industrial gold purchases, which the central bank views as covering refining, freight, and purity costs, is contentious. Miners argue this discount could effectively function as a tax. They also cite logistical challenges, as existing operational plans were based on the 20% commitment, and propose a gradual increase rather than an immediate jump to 30%.
Financial Implications for the Central Bank
The pursuit of a larger gold reserve has financial implications for the Bank of Ghana. The central bank reported an operating loss of approximately GH¢15.6 billion ($1.37 billion) in 2025. This loss was largely attributed to the costs associated with monetary tightening measures and the reserve build-up, including financial setbacks linked to the gold purchase program.
Future Outlook
The success of Ghana’s revamped reserve-building strategy hinges on resolving the ongoing negotiations with the mining sector. The government’s commitment to increasing its gold reserves is clear, driven by the desire for greater economic stability and a stronger currency. However, the ability to secure a higher contribution from miners will depend on finding mutually agreeable terms that balance the central bank’s objectives with the operational and financial realities faced by the mining companies. Observers will be watching closely to see if a compromise can be reached that satisfies both parties and ensures the continued growth of Ghana’s gold reserves.
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