Former Finance Minister Amin Adam Raises Concerns Over GoldBod Initiative’s Structure
During recent parliamentary discussions about the GoldBod initiative, former Finance Minister Dr. Mohamed Amin Adam expressed significant concerns regarding the design of the proposed plan. He cautioned that the structure of GoldBod, as currently laid out, risks creating potential conflicts of interest.
Dr. Amin Adam, serving as the Ranking Member on Parliament’s Finance Committee, highlighted how international best practices typically advise against combining commercial operations with regulatory functions within the same institution. “Globally, the trend is moving away from models where institutions perform both commercial roles and regulatory oversight,” he noted.
He emphasized the importance of maintaining a distinct boundary between commercial and regulatory roles to establish effective checks and balances. “Effective oversight is achievable when the commercial and regulatory functions are distinctly separated,” he added.
Concerns About GoldBod’s Structure
Dr. Amin Adam warned that, if the GoldBod Bill is enacted as proposed, the entity will possess the capacity to trade, export, regulate, and resolve disputes within the gold sector. “As currently structured, GoldBod would handle commercial gold trading and export, act as a regulator, and even serve a judicial role in the gold mining industry. This poses potential conflicts,” he cautioned.
He referenced Ghana’s oil sector as a successful example of separating commercial and regulatory roles. He pointed to the distinction between the Petroleum Commission and the Ghana National Petroleum Corporation (GNPC). “In the oil sector, we successfully differentiated the Petroleum Commission’s regulatory responsibilities from GNPC’s commercial activities,” he explained.
The former minister warned that not adopting a similar framework for GoldBod might entangle regulatory oversight with commercial pursuits, thus leading to conflicts of interest.
Decoding GoldBod
The GoldBod initiative, set forth by the government, aims to formalize gold trading within Ghana, especially focusing on the small-scale mining industry. Its goal is to enhance traceability and bolster Ghana’s standing in the global gold market.
The initiative envisions GoldBod as the exclusive purchaser of gold from licensed small-scale miners through certified aggregators. It also aims to serve as the sole assayer of gold. Proponents argue that this centralized approach could minimize gold smuggling, stabilize the local currency, and bolster foreign exchange reserves. Currently, entities like the Precious Minerals Marketing Company, Bank of Ghana, and various private gold aggregators play roles in gold purchasing in the country.
Success of Previous Gold Purchase Programs
Dr. Amin Adam commended the achievements of the Bank of Ghana’s Domestic Gold Purchase Programme, which was rolled out in June 2021. He noted that the initiative significantly enhanced Ghana’s gold reserves.
Before the inception of this program, Ghana’s total gold reserves amounted to 8.74 tonnes. However, by the end of 2024, the reserves swelled to an impressive 30.5 tonnes, marking a tremendous growth within just a few years. “For decades, our reserves remained at 8.74 tonnes, but thanks to the program, we saw a substantial increase to 30.5 tonnes in three years. It clearly indicates the program’s effectiveness,” he observed.
Dr. Amin Adam’s insights stress the necessity for Parliament to vigilantly ensure robust oversight in refining the GoldBod Bill’s legislation to prevent potential conflicts of interest aligned with global best practices. This would aid in avoiding any entanglement of regulatory duties with commercial operations within the gold sector, thereby safeguarding the integrity of both processes.
