Bank of Ghana (BoG) will soon start a gold purchase programme from the small-scale mining sector. This was announced by Vice President Mahamudu Bawumia of the Republic of Ghana at the maiden edition of the Responsible Small-Scale Mining Awards in Accra.
According to Bawumia, after series of discussions, the Central Bank agreed to start this programme, which would be the first of its kind in the country intended to boost the Ghana’s gold reserves.
This model is what Ethiopia has been practicing, and was adopted by Nigeria. Though a recent entrant in the small scale gold mining space, the Federal Government of Nigeria in 2020 begun the process that made the Central Bank of Nigeria (CBN) to start buying all the gold from local miners at an international price.
In line with the Presidential Artisanal Gold Mining Development Initiative (PAGMDI) scheme, Nigeria realized this milestone in producing the country’s first gold bar of 12.5kg, processed and refined in Nigeria in accordance with the London Bullion Market Association (LBMA) standards and used as a reserve instrument by the Central Bank of Nigeria (CBN). The Central Bank purchased it for N268,608,236.00 from the miners, and made an instant profit of $100,000 on it
According to Raymond Kudzawu-D’Pherdd, the First Vice President of the Accra Mining Network, “If Nigeria continues with her excellent efforts in her mineral resource management carefully, perhaps Ghana and South Africa, could learn a few things from her, or she will overtake them”.
Speaking to AMN news later on the subject, Mr. Kudzawu-D’Pherdd was quick to add that, “Though Ghana has been mining the yellow metal for more than a century, and currently the leading producer of gold in Africa, it is not a race, and so we can learn from each nevertheless, we can share new knowledge with each other now and then. For example, the Community Mining Model is practiced differently in Ethiopia with superior results”.
“Ghana and South Africa have the highest number of experts in the technical mining space on the continent” – he pointed out. “Do you know the quantum of gold in the Bank of England vault?” – he asked.
“In 2018 Small scale mining contributed 43.18% to gold production in Ghana, during a peak of a ban on their activities. This is indicative that small scale mining has the potential to contributing to Ghana’s GDP significantly in equal volumes as the Large Scale Multinational Mining Companies, so special attention must be given to small scale mining as a socio-economic parameter”. – Mr. Kudzawu-D’Pherdd said.
Indeed, state purchase of Ghana’s gold had been assigned to the Precious Minerals Marketting Company in PNDCL 219 and Act 461, 2000. The Minerals Commision has also issuied licences for private entities to do same.
However, Mr. Kudzawu-D’Pherdd believes that, Bank of Ghana’s decision to commence purchasing of gold has the propensity to sanitising the small scale mining space just as has been achieved in Ethiopia, and also transforming the cedi if sustatined. He congratulated both Ghana and Nigeria for following the Ethiopian Model, and called for the expansion of the financial model to include gold purchasing from even the large scale sector in the foreseable future.
Mr. Kudzawu-D’Pherdd said, “The only reason the Ethiopian model wasn’t sustainable in my opinion, seems to have been catered for. The Central Bank of Ethiopia was purching gold from the miners 5% above prevailing LBMA quotes, but Ghana and Nigeria aren’t, and that is very promising”.