Gold Buyers in Ghana Left Stranded for Weeks Without Cash

Gold Buyers in Ghana Left Stranded for Weeks Without Cash

Gold buyers in Ghana's Ashanti Region have been waiting for weeks without receiving funds from GoldBod, a state agency responsible for buying and selling artisanal gold. The delay has forced some operators to halt purchases or borrow to stay in business, despite surging bullion prices.

Funding Shortfall Hits Artisanal Gold Market

GoldBod has not provided funds to its gold suppliers for as long as three weeks, according to five industry sources. "The last two weeks were terrible. You could spend a whole day waiting and not receive any funds," a gold trader in Ghana's Ashanti Region said last week. Another GoldBod-funded buyer in the Western Region said funds had not been received for about three weeks.

GoldBod Denies Funding Shortfall

GoldBod, however, has denied any funding shortfall, stating that funding is provided based on creditworthiness, security, and risk assessments. In a statement, the agency said its gold-purchasing operations remained fully funded and operational. GoldBod's chief executive, Sammy Gyamfi, said at a press conference last week that GoldBod raised nearly $839 million in advances for purchases between March and May.

Decoupling from Bank of Ghana Contributed to Funding Constraints

Kwaku Ohemeng Amoah, chief executive of the Chamber of Gold Buyers, said GoldBod's move to fund the trade from its own balance sheet after decoupling from the Bank of Ghana may have contributed to the funding constraints. "Buyers could seek supplementary financing themselves," he suggested. The Bank of Ghana viewed GoldBod's auction programme as inconsistent with its operating framework, and both institutions were working to address the concerns.

Ghana's Gold Industry Faces Challenges

Ghana, Africa's biggest gold producer, established GoldBod in 2025 with exclusive rights to buy, sell, and export artisanal gold as part of efforts to curb smuggling and boost inflows of foreign currency. GoldBod purchases were initially funded by the Bank of Ghana and helped to boost Ghana's economic recovery. However, the IMF called for an end to central bank financing after losses linked to purchases.

Tighter Controls Introduced to Strengthen Risk Management

GoldBod has introduced tighter controls from August 1, including due diligence requirements, trade-financing agreements, and security guarantees, to strengthen risk management and protect public funds. The agency currently has two licensed aggregators operating under its trade-finance framework. However, fewer than five banks participated in GoldBod's auction programme, and lenders were more comfortable when the central bank backstopped the arrangement.

What Happens Next?

The situation highlights the challenges facing Ghana's gold industry, which relies heavily on artisanal mining. The delay in funding has put many gold buyers in a difficult position, and it remains to be seen how GoldBod will address the issue. The agency's move to decouple from the Bank of Ghana and fund the trade from its own balance sheet may have contributed to the funding constraints, and it will be interesting to see how this situation unfolds.

Source: Joy Online