S&P Global Ratings has warned that Ghana’s new gold purchasing policy may harm the agriculture sector, especially cocoa farming.
To formalize small-scale mining and increase gold exports, the government created the Ghana Gold Board (GoldBod). This agency has full authority to buy, weigh, assay, and export gold.
S&P acknowledged that the move boosts exports in today’s high-price gold market. However, the ratings agency raised concerns about its impact on farming.
“The initiative significantly boosts exports. But it has negative implications for the agricultural sector, especially cocoa farming,” S&P said in a statement.
Farmers may abandon cocoa fields in favor of small-scale mining, which promises quicker profits. This shift could lower cocoa output and threaten Ghana’s agricultural stability.
S&P also shared updates on Ghana’s broader fiscal performance. While the cash-based deficit matched revised targets, the commitment-based deficit exceeded the budget by 3.7% of GDP due to unpaid bills to suppliers and contractors.
Despite these fiscal issues, Ghana’s foreign reserves are recovering. In 2024, the country posted a $3.58 billion current account surplus, the largest on record. This surplus equals 4.4% of GDP and came from a stronger trade balance and rising remittances.
As a result, usable foreign exchange reserves rose by $2.8 billion, reaching nearly $4.6 billion.
