Surging gold prices send shockwaves through the chocolate market
Chocolate prices are hitting record highs amid a cocoa shortfall across West Africa. In Ghana – the world’s second-largest cocoa producer after Côte d’Ivoire – output fell by over 20 per cent last year due to adverse weather conditions and pest outbreaks.
Illegal gold mining – also known as galamsey – is aggravating the problem by destroying farmland, contaminating water, and displacing local farmers from cocoa land.
In 2022, Ghana’s Cocoa Board (COCOBOD) reported that more than 80 per cent of cocoa farms in the Eastern region had been affected by mining, which had a knock-on effect on chocolate prices of around 20 per cent.
With bullion up over 40 per cent in the past year to about $3,700 (£2,700) an ounce, many farmers are abandoning cocoa for gold.
Against that backdrop, the state’s response to small-scale gold trading – and the integrity of exports – has come under sharper scrutiny.
Gold state agency under scrutiny
Gold smuggling in Ghana is not a new phenomenon, but in recent years, it has had devastating effects on the wider economy.
In a 2024 report, SwissAid estimated that 229 tonnes of gold worth more than $11.4bn (£8.44bn) were smuggled out of the country between 2019 and 2023.
To tighten control, the government established the Ghana Gold Board (GoldBod) in April 2025 to regulate small-scale gold exports, promote sustainability and responsible sourcing, and tackle smuggling.
The Ghanaian government also committed to funding GoldBod to buy three tonnes of gold every week in a bid to boost foreign exchange reserves, encourage miners to trade through official channels, and curb the black market.
It has also abolished the 1.5 per cent withholding tax on unprocessed gold, which had previously driven many small-scale miners into illicit trade.
But the new state agency is already facing criticism that it may be exporting illegally mined gold. In September, GoldBod’s CEO, Samuel Gyamfi, announced that the corporation had exported nearly 67 tonnes of gold in the first eight months of 2025 under the government’s new gold export framework with small-scale mining companies.
But Swiss NGO SwissAid told CityAM that the figure was “preoccupying,” raising concerns that part of the gold purchased by the state body may in fact come from galamsey.
“The figure of 67 tonnes of gold purchased by GoldBod in the first eight months of 2025 is very close to our estimate of total artisanal and small-scale mining production, around 68.8 tonnes,” which itself includes gold mined illegally, SwissAid said.
“This strengthens the suspicion that part of this gold has not been mined in full respect of the law. This gold is exported and therefore enters global supply chains, which is particularly problematic.”
The lack of traceability in gold flows
GoldBod’s mandate is to strengthen industry regulation and introduce a system of traceability – using satellite, blockchain and Radio-Frequency Identification technology – to verify the origins of gold.
But Gyamfi admitted on Joy FM’s Super Morning Show (one of Ghana’s most popular and influential radio programmes) that these systems are not yet implemented and are still being developed.
“Before the end of this year we will introduce the traceability system and commence the implementation,” he said. This suggests that, until then, the agency cannot guarantee that all its exports are legally sourced.
Part of the problem lies in how the gold is obtained. GoldBod does not buy gold directly from miners. Instead, the purchases are made through private, licensed individuals who buy from whoever brings them gold, but have no visibility into the actual mining sites.
This system creates major gaps in oversight and regulation. “They don’t have the technologies or any system that would let them trace the gold they buy – where it was mined, who mined it and when,” Gyamfi said.
CityAM contacted GoldBod with a right to reply, offering the agency the opportunity to comment to SwissAid’s concerns about its export figures, traceability measures, and assurances that the gold they export is legally sourced. At the time of publication, GoldBod has not responded.
The UK/Ghana gold programme
The GoldBod initiative is supported by the UK/Ghana Gold Programme, a collaborative initiative between the two governments aimed at breaking the link between illegal artisanal gold mining and serious organised crime.
The programme also aims to enhance responsible sourcing practices and market mechanisms for legal gold, aligning with standards set by the London Bullion Market Association (LBMA). It promotes the formalisation of the gold sector to strengthen Ghana’s foreign exchange reserves.
Ghana is preparing to undergo critical international scrutiny of its anti-money laundering measures. The gold mining sector is rated as a high-risk sector for money laundering and illicit financial flows, and failure to meet the required standards set by the Financial Action Task Force could result in Ghana being placed on a grey list.
Keith McMahon, the UK’s Deputy High Commissioner to Ghana, reiterated UK’s support ahead of the anti-money laundering review: “The United Kingdom stands firmly with Ghana in its efforts to strengthen transparency and governance in the gold sector. This is essential not only for Ghana’s economy, but for global financial integrity.”
Ghana’s Finance Minister Dr Cassiel Ato Forson added that the collaboration with the UK marks “a significant step toward ending gold smuggling and fostering a more transparent and profitable gold sector.” He called on financial institutions, regulators, and law enforcement agencies to unite behind a joint action plan – an effort in which the UK is actively engaged.
The Environmental and social cost of illegal mining
The establishment of GoldBod comes amid mounting alarm over the environmental and social impact of galamsey.
While unlawful mining is estimated to contribute about $2.3bn (£1.7bn) a year to Ghana’s informal economy, it costs the formal economy around $500m (£374m) annually in lost revenues and environmental damage.
SwissAid and many other local organisations in Ghana warned that deforestation, pollution, and water contamination are “wreaking havoc” across the country.
Around 250,000 hectares of forest have been destroyed – about 1.6 times the size of Greater London – while toxic chemicals like mercury and cyanide used in extraction are contaminating rivers, groundwater and the entire food chain via crops irrigated with the water.
WaterAid reported a 75 per cent reduction in clean water supplies in Cape Coast and Elmina, warning of an impending “ecocide,” and Ghana Water Limited said pollution levels are seven times higher than usual, raising concerns that, unless illegal mining is stopped, the country may be forced to import drinking water by 2030.
Farmland in key cocoa-growing areas is being destroyed, contributing to the decline in cocoa production already exacerbated by dry weather conditions and pests, which is ultimately driving up prices on grocery shelves.
“Gold mining in Ghana has become a major issue as it has literally destroyed an untold number of cocoa farms, pollutes the surrounding area and now seems to be moving into eastern Ivory Coast,” Drew Geraghty, commodity broker at TP ICAP, told CityAM.
Mahama’s fight against galamsey
President John Mahama, who previously led Ghana from 2012 to 2017 and returned to office in December 2024, has long been trying to eradicate the illegal practice of galamsey.
In 2017, his government launched Operation Vanguard, a joint military-police task force that arrested more than a thousand unlicensed miners and imposed a two-year ban on small-scale mining.
Yet, despite government efforts to curb the practice, galamsey continues to thrive due to high gold prices, unemployment, and weak enforcement of regulations.
According to local experts, the problem has been exacerbated by corruption and the involvement of powerful individuals who profit from the illegal trade.
Earlier this year, two senior members of the ruling National Democratic Congress – Akubu Abanga and Yamin Joseph – were investigated by the Economic and Organised Crime Office over allegations of illegal mining.