Gold’s glittering price surge rekindles Ghana’s galamsey temptation

By Praisebell Rosemond Larbi

Gold is once again dazzling the world and unsettling Ghana. On 3 October 2025, global markets reported gold prices touching nearly USD3,896 per ounce, close to recent record highs. Analysts say the metal has risen by roughly 47 per cent year-to-date, making this one of its strongest rallies in decades.

To investors worldwide, the rally is a glittering refuge amid economic uncertainty. Safe-haven demand has risen as markets react to geopolitical tensions, the US government shutdown, and the growing likelihood of interest rate cuts.

But while global investors celebrate, Ghana, Africa’s top gold producer and a nation heavily dependent on mineral revenue, faces an unsettling dilemma. The soaring price of gold risks rekindling one of the country’s most destructive temptations: galamsey, the local term for illegal small-scale mining.

A Golden Opportunity and a National Wound

Where gold glitters, many Ghanaians see opportunity. For impoverished rural youth, particularly in mining communities across the Ashanti, Western, Eastern, and Central Regions, gold represents a way out of hardship. Yet for decades, that route has exacted a devastating price.

Once hailed as a route out of poverty, galamsey has evolved into a national crisis. The largely unregulated practice, fuelled by poverty, unemployment, and weak enforcement, has ravaged forests, polluted rivers, and displaced farmers. Studies have revealed dangerously high levels of mercury and other toxins in soil and water near artisanal mining sites.

Across major river systems such as the Pra, Ankobra, Offin, and Birim, once-pristine waters have turned brown with silt and chemicals. The Ghana Water Company and other agencies have warned that contamination is raising treatment costs and threatening the operations of some treatment plants.

The Price Temptation: High Gold Prices and the Lure of Quick Wealth

When international prices surge, the economics of illegal mining become more attractive to people with few alternatives. History shows that spikes in bullion prices have been followed by rises in informal mining activity as risks are weighed against the possibility of quick earnings.

Unemployment and the rising cost of living deepen the pressure. For many rural households, short spells of galamsey income can appear to outweigh months of farm wages, which makes enforcement alone insufficient without economic alternatives in affected areas.

President Mahama’s Renewed Offensive against Galamsey

The government has signalled renewed determination to confront the problem. President John Dramani Mahama has engaged civil society organisations at the Jubilee House and pledged stronger action, saying he is determined to win the fight against illegal mining and urging all stakeholders to hold officials to account.

As part of regulatory reform, the government has moved to centralise gold trading under the Ghana Gold Board (GoldBod) and to tighten control over small-scale transactions. GoldBod requires licences for trading and aims to formalise the sector to curb smuggling and under-reporting.

Attorney-General Dominic Ayine has said a new legislative instrument  L.I. 2501  will be laid before Parliament to revoke the controversial L.I. 2462 that critics say opened forest reserves to mining. Officials have indicated that the new instrument will be presented when Parliament resumes, as part of efforts to protect forest reserves and strengthen environmental safeguards.

The President and ministers have also signalled tougher action on the importation and unauthorised use of heavy equipment. Plans are underway to strengthen monitoring systems for excavators and other machinery used in illegal mining.

Law Enforcement Meets Economic Reality

Ghana has launched a national task force backed by security agencies to tackle illegal gold trading and smuggling.

The state has also promised measures to improve traceability, move toward refined exports, and build domestic assay and refining capacity. The task force aims to recover revenue lost to illicit channels and to prosecute kingpins and financiers, not only field operators.

But enforcement alone is unlikely to be decisive. Experts and civil-society actors warn that without credible alternative livelihoods and community buy-in, people pushed out of illegal sites will often return. Formalisation programmes and community-based schemes can help, but they need proper funding, supervision, and market linkages.

Community Mining and Formalisation

The government has said it will scale up regulated community approaches to artisanal mining to bring miners into a legal framework and reduce environmental risk. Official statements discuss expanding the Community Mining Scheme and other formalisation efforts, though precise figures on the number of participants remain limited.

CSOs and Traditional Authorities Rally behind Enforcement

Civil-society groups and traditional rulers have broadly welcomed the government’s stated intention to revoke L.I. 2462 and strengthen protections for rivers and forests, while urging speed and transparency. Media coalitions and NGOs have called for prompt action that goes beyond rhetoric and for scrutiny of prosecutions and asset seizures.

Ghana’s Paradox: Rich in Gold, Poor in Gains

Ghana’s history with gold is both illustrious and ironic. The country remains Africa’s top gold producer. The Chamber of Mines reports record output in 2024 of around 4.8 million ounces, and projections for 2025 point toward roughly 5.1 million ounces if forecasts hold.

Yet formal revenue is undermined by smuggling, under-reporting, and an artisanal sector that remains only partially formalised. A 2025 report by Swissaid found a substantial trade gap between Ghana’s declared exports and corresponding imports recorded by destination countries, equivalent to an estimated USD11.4 billion over five years.

Environmental Devastation and Health Hazards

Beyond lost revenue, the environmental and health toll is severe. A government-backed assessment by Pure Earth and the Environmental Protection Agency found dangerously high mercury and arsenic levels in some mining communities, posing serious risks to human health and ecosystems.

Communities in areas such as Dunkwa-on-Offin and Obuasi report water sources so contaminated that fish have died and farmland productivity has fallen.

Farmers and fisherfolk see their livelihoods vanish as soils and waterways degrade, and local clinics report rising cases of illness linked to pollution.

The Global Factor: Safe-Haven Gold, Risk-Haven Ghana

International analysts say gold’s rally is driven by investor fear of inflation, weaker growth, and political instability and that higher prices can perversely incentivise illegal activity in producer countries if governance is weak.

The confluence of soaring prices and porous controls is a recipe for increased informal extraction and smuggling unless countermeasures are effective.

The Road Ahead: Balancing Profit, Protection and People

Turning the current boom into durable national benefit will require a three-pronged approach:

1.         Stronger enforcement and transparency: Target financiers and smugglers, improve traceability, prosecute high-level facilitators, and adopt technology-driven monitoring.

2.         Alternative livelihoods and formalisation: Scale up legalised community mining, promote local value addition, and invest in vocational and agricultural programmes in mining regions.

3.         Community partnership and environmental restoration: Involve traditional authorities, civil-society groups, and local assemblies in environmental education and resource monitoring, supported by clear legal safeguards.

International partners can assist with refining technology and community development funds, but the ultimate responsibility lies with national and local actors working together.

Conclusion: The Glitter and the Gamble

Gold may glitter, but its glow can blind. As global markets celebrate record profits, Ghana must ensure the current price surge does not drag the country back into cycles of environmental damage and lost revenue.

If the government uses this moment to formalise the sector, crack down on smuggling, and invest in local value addition and livelihoods, the boom could translate into lasting benefit.

But if short-term thinking prevails, Ghana risks trading its rivers, forests, and health for fleeting profits. The choice before the country is stark: harness the price surge for sustainable development, or allow the glitter to become a gilded trap.

“I am determined. Let us win this galamsey fight together,” President Mahama told civil-society representatives at Jubilee House on 3 October, urging transparency and broader public participation in the campaign against illegal mining.