GoldBod to roll out a self-financing model not anchored on BoG – Sammy Gyamfi

The Chief Executive Officer of the Ghana Gold Board (GoldBod), Sammy Gyamfi says the institution is moving towards a self-financing model that will reduce its reliance on the Bank of Ghana (BoG) to fund its gold purchasing operations.

According to him, the new financing framework, provided for under the GoldBod Act, gives the state-owned gold trading institution the authority to raise funds directly from the financial market to finance its activities.

Gyamfi explained that GoldBod will increasingly rely on commercial banks and gold offtakers to mobilise the liquidity required to purchase, aggregate and trade gold.

He said the arrangement represents a shift from the previous model, under which the Bank of Ghana played a significant role in financing activities connected to the government’s domestic gold purchase programme.

“This new GoldBod model, as envisioned under the GoldBod Act, is not anchored on Bank of Ghana financing GoldBod. GoldBod has been given the powers under Section 18 of the GoldBod Act by Parliament to raise money for itself from the financial market.”

Gyamfi said the end of the Bank of Ghana’s financing role under the previous arrangement should not be interpreted as evidence that GoldBod had been operating improperly.

He noted that GoldBod is now expected to establish stronger relationships with commercial banks and both local and international gold buyers to secure the financing needed to execute its mandate.

Under the new model, commercial banks are expected to provide short-and medium-term financing for gold purchases while offtakers could provide funding through structured arrangements linked to the purchase and export of gold.

The model is expected to create a revolving financing cycle in which GoldBod accesses funds to purchase gold, aggregates supplies and sells them to approved offtakers with proceeds from those transactions supporting subsequent purchases.

Gyamfi said the arrangement would make GoldBod more commercially sustainable while reducing the extent to which its operations depend on the balance sheet of the central bank.

The Bank of Ghana was involved in financing arrangements connected to the government’s domestic gold purchase programme until March this year.

Under the new framework, however, greater responsibility will rest with GOLDBOD to mobilise the funds required for its operations.

The CEO said this distinction is important in understanding the financing structure envisaged under the new GoldBod Act.

He added that the new approach could encourage greater participation by commercial banks in Ghana’s gold sector, particularly in financing transactions involving licensed gold producers and aggregators.

GoldBod is mandated to purchase, aggregate and trade gold produced in Ghana including gold sourced from the small-scale mining sector.

Its expanded role is intended to strengthen Ghana’s control over the gold trade, improve traceability and ensure that a greater share of the value generated from the country’s gold remains within the formal economy.

Gyamfi stressed that the success of the self-financing model will depend largely on GoldBod's ability to attract financing from financial institutions and secure reliable offtake arrangements.

He said the new structure could also give GoldBod greater flexibility to respond to movements in international gold prices and changes in market demand.

Under the proposed arrangement, financing would be more closely tied to GoldBod’s underlying commercial activities and cash flows, allowing the institution to mobilise capital without directly relying on government funding or the Bank of Ghana’s balance sheet.