Article By Frank Nana Amponsah, Mining Expert
International Experts Warn Against Abandoning Established System; Critics Question Wisdom of Adopting Demonstrably Flawed Framework
The Ghana Gold Board’s (GoldBod) announcement to abandon its current licensing framework in favour of Tanzania’s gold trading model has triggered significant concern among industry stakeholders, international trade experts, and government officials who question the prudence of dismantling a system that has become a continental benchmark for gold sector governance.
The proposed cancellation of Tier 1 and Tier 2 trading licenses, along with the Self-Financing Aggregator programme, represents a fundamental departure from the regulatory architecture that has positioned Ghana as a leading model for gold sector management across Africa. The move has prompted urgent warnings from international gold trading specialists and development economists who caution that the transition could expose Ghana to operational inefficiencies, security vulnerabilities, and economic losses that Tanzania has struggled to resolve.
Ghana’s System: A Continental Model Under Threat
For just within a year, GoldBod has cultivated a tiered licensing system that has attracted international recognition and study. The current framework, characterized by its structured approach to licensing, compliance mechanisms, and market participation levels, has created a regulatory environment sufficiently robust to draw interest from multiple countries seeking to understand and replicate Ghana’s best practices.
“Ghana’s gold trading license system represents one of the most sophisticated frameworks on the African continent,” says Dr. Emmanuel Kojo Nkrumah, a leading gold market analyst based in London. “The Tier system provides clarity, creates market structure, and allows for scalable participation. The fact that other nations are studying this model is testimony to its effectiveness.”
This international interest underscores a critical reality: Ghana’s current system is not merely functional—it is aspirational. Countries from West Africa, East Africa, and beyond have sent delegations to study GoldBod’s operational methods, seeking to implement comparable standards in their own jurisdictions. This external validation has positioned Ghana as a thought leader in precious metals governance.
However, the proposed shift threatens to reverse this trajectory entirely.
Tanzania’s Model: Operational Realities That Demand Scrutiny
The Tanzania gold trading framework, which GoldBod proposes to emulate, operates under significantly different conditions and has demonstrated notable vulnerabilities that Tanzanian authorities continue to address. Critics within Ghana’s trading community and international observers have raised substantial concerns about several operational challenges inherent to the Tanzanian system.
“Tanzania’s gold sector faces persistent security challenges that are fundamentally different from Ghana’s operational environment,” explains Professor Margaret Osei, an international trade specialist who has conducted extensive research on comparative gold market governance. “Armed robbery incidents at trading locations in Tanzania have been documented at rates substantially higher than Ghana’s current experience. When you shift to a system designed to manage those challenges, you’re essentially accepting a different risk profile.”
The Tanzanian model has contended with repeated security incidents at gold trading points and aggregation centres. These events have resulted in significant financial losses, operational disruptions, and undermined confidence in the system’s capacity to protect trader interests and government revenue. Documented cases of armed attacks on gold trading facilities in Tanzania have prompted the country to increase security expenditures substantially—costs that ultimately impact operational efficiency and profitability for all sector participants.
Beyond security considerations, the Tanzania framework has struggled with system ineffectiveness that has manifested in multiple dimensions. Traders operating within the Tanzanian structure have reported bureaucratic delays, inconsistent enforcement mechanisms, and regulatory uncertainty that have created friction within the market. These operational deficiencies have contributed to informal market activity and illicit gold trading that the system was ostensibly designed to prevent.
The Smuggling Question: A Dubious Premise
While GoldBod leadership has cited smuggling concerns and cost to government as a primary rationale for the proposed transition, critics and international experts question whether adoption of the Tanzanian model would meaningfully address this challenge—and whether the operational trade-offs would prove worthwhile.
“The smuggling problem in Ghana’s gold sector is real, but it is not unique to the current licensing structure,” notes Dr. Mac Daqniels, a senior analyst at the African Center for Gold Market Studies in Johannesburg. “In fact, research suggests that system clarity and trader confidence—both strengths of Ghana’s current framework—actually reduce smuggling incentives. When traders understand rules clearly and trust the system, they are more likely to participate formally. The Tanzania model has not demonstrated superior performance on this metric.”
Ghana has contended with smuggling pressures common to gold-producing nations, particularly given the commodity’s high value-to-weight ratio and proximity to porous borders. However, the solution to this challenge lies not necessarily in wholesale system replacement but in enhanced enforcement, technological innovation, and targeted reforms within the existing framework.
Multiple international best practices—from blockchain-based tracking systems to enhanced border monitoring—can be integrated into Ghana’s current structure without abandoning its proven advantages.
Tanzania’s approach to smuggling has not produced demonstrably superior outcomes. Informal gold trading, illicit export channels, and smuggling remain persistent challenges within Tanzania’s system, suggesting that the structural features GoldBod proposes to adopt are not inherently more effective at addressing this problem.
Cost Implications and Government Expenditure
The government’s concern regarding costs associated with the current system warrants examination, but analysis suggests that the Tanzania transition may not deliver the fiscal relief anticipated.
“When you shift from a well-organized, structured licensing system to a different model, you typically incur transition costs that can be substantial,” explains Dr. Amelia Richardson, an economist specializing in African commodity markets at the Oxford Centre for Global Commodity Studies. “These include retraining costs, system implementation, infrastructure changes, and often enhanced security expenditures. Ghana’s government should conduct rigorous cost-benefit analysis before assuming that a new system will reduce expenditures.”
Tanzania’s higher security costs, attributed directly to the system’s operational vulnerabilities, would likely translate into increased government expenditure on security provision, regulatory oversight, and crisis management. Rather than reducing fiscal burden, the transition could impose new costs that Ghana’s government is not currently bearing. The existing GoldBod framework, by contrast, has achieved relative cost efficiency through its structured approach and trader compliance.
International Best Practices: A Path Forward
Rather than abandoning its current system, Ghana’s gold sector would benefit from selective modernization that enhances the existing framework’s effectiveness. International best practices in gold sector governance suggest multiple avenues for improvement that do not require wholesale system replacement.
“Ghana should consider technological integration, enhanced due diligence procedures, and strengthened inter-agency coordination to address smuggling,” recommends Professor David Chen, director of the International Gold Governance Network at the Basel Institute on Governance. “These reforms can be implemented within the current licensing structure, building on its existing strengths rather than discarding them.”
Such enhancements might include implementation of blockchain-based gold provenance tracking, real-time export monitoring systems, enhanced cross-border coordination with neighboring countries, and expanded use of technological tools to verify gold origin and prevent diversion to informal channels. These approaches have demonstrated effectiveness in other jurisdictions and can be adapted to Ghana’s context without requiring the operational disruptions inherent in system replacement.
The Reputational and Competitive Dimension
Beyond operational considerations, the proposed shift carries significant reputational implications for Ghana’s positioning as a continental leader in gold sector governance. Countries that have invested time and resources in studying GoldBod’s system do so because they view Ghana as an exemplar of effective regulation. Abandoning this model for a framework that has demonstrated inferior performance signals instability and uncertainty to the international market.
“Ghana’s gold sector benefits from a reputation for regulatory sophistication,” notes Dr. Boateng. “This reputation attracts responsible traders, international investment, and policy attention from development institutions. Shifting to a less proven system undermines that positioning. In competitive global markets, consistency and demonstrated excellence matter.”
Stakeholder Concerns and Democratic Considerations
The substantial opposition from traders, market participants, and civil society figures reflects legitimate concerns about the proposed transition. These stakeholders operate within the current system, understand its mechanisms, and have developed business models adapted to its requirements. The transition would impose adjustment costs on these participants and expose them to new operational uncertainties.
“When you have a system working reasonably well, with established actors who understand the rules and international recognition of effectiveness, the burden of proof lies with those proposing change,” emphasizes Professor Osei. “GoldBod should articulate specifically how the Tanzania model addresses current challenges more effectively, with concrete evidence. The current rationale appears insufficiently developed to justify such consequential change.”
A Recommendation for Deliberative Reflection
Rather than proceeding with immediate implementation of the proposed transition, Ghana’s government and GoldBod leadership should undertake comprehensive review of alternative pathways. This review should include rigorous cost-benefit analysis comparing the current system with the Tanzania model, detailed assessment of security implications, and evaluation of targeted reforms that could address smuggling concerns within the existing framework.
International experts recommend that Ghana commission an independent evaluation of both systems, engaging external analysts with no institutional stake in either outcome. This evaluation should assess operational effectiveness, security implications, cost structures, market accessibility, and smuggling control mechanisms for both frameworks.
“Ghana has built something valuable in its gold trading system,” concludes Dr. Richardson. “Before dismantling it, the government should exhaust alternatives for improvement. The burden of proof for such consequential change is substantial, and the current justification does not yet meet it.”
The path forward lies not in abandoning proven excellence for untested alternatives, but in strategic enhancement of an established system that has earned international recognition and demonstrated effectiveness.
This article reflects analysis based on international gold market governance literature, comparative studies of African commodity sector regulation, and interviews with leading experts in gold market structures and precious metals trade. Additional reporting by industry associations and government sources contributed to this analysis.