Make responsible mining bankable

November 5, 2026

2 minutes read

GHANA’S small-scale mining sector plays an important role in the national economy. It provides livelihoods for thousands of people, supports businesses in mining communities and contributes to gold production and foreign exchange earnings.

Yet, despite its economic importance, the sector continues to face a major obstacle: access to finance.

The Ghana Association of Banks (GAB) has disclosed that banks are reluctant to lend to small-scale mining operators because of fears that their funds could end up supporting illegal mining, popularly known as galamsey, and activities that destroy the environment.

The concerns are understandable. No responsible financial institution would want its resources associated with the destruction of forests, pollution of water bodies or other illegal activities. Banks also have a duty to protect depositors’ funds and their reputations.

However, the situation raises an important question: if legitimate small-scale miners cannot access formal financing, where are they expected to obtain the resources needed to operate responsibly and expand their businesses?

The reluctance of banks to support the sector could leave genuine operators dependent on informal lenders and other sources of finance that may impose unfavourable conditions. It could also prevent them from acquiring modern equipment and adopting safer, environmentally friendly mining practices.

Ghana must, therefore, distinguish between responsible small-scale mining and illegal operations. The activities of galamsey operators should not become a reason to deny every small-scale miner access to credit.

A representative of the GAB, Mr Lawrence Sackey, has indicated that banks are prepared to support responsible operators through structured loans, equipment financing and direct payments to suppliers.

However, he says stronger regulatory controls, transparent gold trading arrangements and effective monitoring systems are needed to give financial institutions confidence.

These proposals deserve serious attention from the Government, regulators and mining industry stakeholders.

The first priority should be to strengthen licensing and monitoring systems. Banks must be able to establish that applicants have valid licences, legitimate access to mining concessions and the necessary documentation to operate. Such checks must be rigorous without creating unnecessary bureaucratic hurdles for genuine businesses.

Transparency in gold trading is equally important. When the origin of gold cannot be properly established, it becomes difficult to distinguish legally mined gold from proceeds of illegal operations. A credible traceability system would help address this challenge.

The Ghana Gold Board (GoldBod) has an important role to play in ensuring that gold purchasing arrangements are transparent and accountable. Its operations should strengthen confidence in the supply chain and make it easier for banks to identify legitimate operators.

Banks must also consider developing financing products tailored to responsible small-scale miners. Equipment leasing, supplier-backed financing and loans tied to verified production could reduce lending risks. Direct payments to approved suppliers would further ensure that funds are used for their intended purposes.

The Government must, meanwhile, enforce environmental standards consistently. Operators who pollute rivers, destroy forest reserves or mine outside authorised concessions must face the law, regardless of their political or economic connections. Formalisation must never become a cover for illegal mining.

The country cannot afford to abandon a sector with considerable economic potential because of illegal practices. Neither can it allow the pursuit of gold to destroy its natural resources.

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