Ghana, the jewel of West Africa, is realizing a long-cherished dream of natural resource-producing countries: refining its gold locally. Last August, the Royal Ghana Gold Refinery opened its doors in Accra, becoming the first gold miner on the African continent to invest in a modern facility capable of processing up to 400 kilos of gold per day, at a purity of 24 carats. This initiative, welcomed by Vice President Mahamudu Bawumia, symbolizes the Ghanaian government’s commitment to regaining full control over the value of its precious mineral.
Gold has always occupied a prominent place in Ghana’s economy, accounting for nearly half of its exports in 2023. By refining this precious resource locally, the country aims to strengthen its economic stability by increasing its foreign exchange reserves and improving its balance of payments. A strategy that aims to protect it from fluctuations and external shocks, underlines Ernest Addison, Governor of the Central Bank of Ghana.
However, for Ghanaian gold to compete on global financial markets, the refinery must obtain the coveted certification of the London Bullion Market Association (LBMA). This precious sesame is not easy to obtain, as it requires the refinery to maintain a certain volume of production for at least three consecutive years. A condition justified by Bright Simons, economist and vice-president of the Ghanaian think tank Imani, who points out that the quality of small-scale refining does not necessarily guarantee the same quality on a large scale.
To effectively integrate artisanal gold production into this local refining process, major challenges must be overcome. The main obstacle is the lack of capital, which hinders the development of local refineries. Despite the presence of a dozen refineries in the country, none has yet managed to obtain LBMA certification, partly due to the low profitability of gold refining.
Furthermore, it is crucial to ensure a regular supply of gold, particularly from small mines scattered across the country. This requires the establishment of incentives to encourage small miners to collaborate and supply their production to the local refinery, rather than to foreign players. The traceability of the gold extracted is a major issue in this context, especially in a country affected by illegal gold mining.
The road to true sovereignty in the exploitation and development of its natural resources is not without pitfalls for Ghana. However, the inauguration of the Royal Ghana Gold Refinery marks an important step towards this much-desired autonomyBy overcoming these obstacles, Ghana could strengthen its economy, protect its gold heritage and pave the way for sustainable and equitable development for its citizens.