Kofi Bentil: GoldBod Marks New Era in Ghana’s Gold Sector

Kofi Bentil, a senior vice-president of IMANI Africa, has defended the establishment and operations of the Ghana Gold Board (GoldBod), describing it as the best approach Ghana has so far adopted to manage its gold resources. He made the comments on JoyNews' Newsfile, where he also cautioned that GoldBod is still evolving and should not be presented as a flawless institution.

A New Approach to Gold Trading

GoldBod represents a significant improvement over an earlier arrangement under which the Bank of Ghana (BoG) was directly involved in gold trading and bore the financial consequences of the transactions. According to Mr Bentil, the previous structure created problems for the central bank, whose primary responsibilities include monetary and financial stability, as it was also carrying the risks associated with commercial gold trading.

The losses belonged on the books of Bank of Ghana, said Mr Bentil, adding that the arrangement created challenges for the central bank. He explained that the structure was among the reasons for calls for a different model in which the commercial risks associated with gold trading would be separated from the central bank.

Separating Risks from the Central Bank

Ghana is now transitioning towards a system in which GoldBod will have its own capital and operate more independently from the Bank of Ghana. Under this model, GoldBod would assume the commercial risks and rewards associated with its gold purchasing and trading activities. Losses from trading would therefore no longer be placed directly on the books of the Bank of Ghana, while profits or other benefits would accrue to GoldBod.

Mr Bentil argued that public discussion should focus on identifying and correcting weaknesses rather than concluding that the entire GoldBod concept is fundamentally flawed. He rejected suggestions that the establishment of GoldBod was itself a policy mistake, saying "anybody trying to suggest that GoldBod is a mistake is wrong."

Areas for Improvement

Despite his strong defence of GoldBod, Mr Bentil acknowledged that the institution still has areas that need improvement. "We have not reached the point where we are perfect yet," he said. He maintained that Ghana's experience with gold trading and the challenges associated with the previous arrangement demonstrate the need for an institution capable of managing the commercial side of the country's gold resources.

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GoldBod is the best we have done with our gold resources yet, said Mr Bentil. He emphasized the importance of identifying and correcting weaknesses rather than concluding that the entire GoldBod concept is fundamentally flawed. The transition towards a more independent GoldBod is a significant step forward in Ghana's gold sector, according to Mr Bentil.

The success of GoldBod will depend on its ability to manage commercial risks and rewards associated with gold trading. As the institution continues to evolve, it is essential to identify and correct weaknesses to ensure its long-term sustainability. With its own capital and increased independence, GoldBod is poised to play a crucial role in Ghana's gold sector, but it remains to be seen how it will perform in practice.

Source: JOY