Ghana’s declining gold output in 2025, despite soaring global prices, has reignited debate about how responsive the country’s mining sector truly is to market incentives. Economist and finance analyst Senyo Hosi says the figures expose a deeper structural reality rather than a market anomaly.
In a statement released on Wednesday, January 7, Mr Hosi revealed that large-scale gold production slipped from about 104 metric tonnes in 2024 to nearly 101 metric tonnes in 2025, even as international gold prices reached historic highs. According to him, this outcome contradicts the simplistic assumption that price growth naturally drives higher output.
He argued that gold mining operates under conditions of short-term supply rigidity, where production cannot be easily adjusted in response to price movements. Most large-scale mines, he explained, are already running close to their operational limits, and expanding capacity requires long-term capital investment, specialised labour, and advanced technology.
To illustrate the point, Mr Hosi noted that economics does not always follow neat mathematical logic. He likened gold to rare commodities such as the 1945 Domaine de la Romanée-Conti wine, where scarcity ensures that rising prices do little to increase availability. In such cases, price reflects rarity rather than production flexibility.
While artisanal and small-scale mining (ASM) is generally more adaptable, Mr Hosi said the sector’s responsiveness was significantly curtailed in 2025. Regulatory measures—including restrictions on new concessions and tighter controls on mining equipment imports—limited the ability of small operators to scale up production, even amid favourable prices.
He further warned that official production data has been distorted by gold smuggling, which complicates assessments of true output levels. Drawing on findings from SwissAid and UN COMTRADE, he suggested that much of the reported growth in ASM production during the year represented smuggled gold re-entering formal channels, rather than newly mined output.
According to Mr Hosi, recent government interventions have helped correct these distortions. Measures such as GoldBod’s Domestic Gold Purchase Programme, enhanced enforcement against illegal trade, and the removal of withholding taxes have improved transparency and reduced incentives for smuggling.
Taken together, these factors, he said, confirm that Ghana’s gold supply curve remains steep and largely inelastic in the short term. High prices may improve profitability, but they do not eliminate constraints linked to mine capacity, skills shortages, and regulatory frameworks.
Looking ahead, Mr Hosi urged policymakers to shift focus from short-term price movements to long-term sector strategy, including sustained investment in large-scale mining, protection of strategic gold reserves, and leveraging Ghana’s position as Africa’s largest gold producer to support industrial growth and economic resilience.
“Higher gold prices alone cannot explain Ghana’s recent production trends,” he concluded, stressing that informed policy decisions must account for supply rigidity, smuggling dynamics, and institutional reforms.
