Economist and finance analyst Senyo Hosi has offered insights into Ghana’s gold production trends, cautioning that rising gold prices do not automatically translate into higher output.
In a statement shared with Citi News and dated Wednesday, January 7, Hosi noted that despite record-high gold prices in 2025, large-scale mining output in Ghana fell from about 104 metric tons in 2024 to 101 metric tons in 2025. He attributed this to the inelastic nature of gold supply, operational constraints, and regulatory challenges.
Hosi explained that the typical economic principle—that price increases incentivise producers to supply more—is not always applicable.
“Economics is often not a perfect math,” he said, citing examples like the 1945 Domaine de la Romanée-Conti wine, where limited supply makes higher prices irrelevant for production.
He emphasised that gold mining, unlike manufactured goods, is labour-intensive and capital-heavy. Mines already operating near full capacity cannot easily increase output, even when global prices rise. Artisanal Small-Scale Mines (ASM), while more flexible, faced regulatory constraints in 2025, including limits on new mining concessions and restrictions on equipment imports.
Hosi further highlighted the role of smuggling in official production figures. Analysis from SwissAid and UN COMTRADE indicates that much of the surge in ASM-reported production in 2025 reflects smuggled volumes returning to formal channels rather than a genuine response to higher prices.
According to Hosi, government interventions—including GoldBod’s Domestic Gold Purchase Programme, legal enforcement, and removal of withholding taxes—played a key role in regularizing the market and improving official reporting.
He concluded that Ghana’s gold supply curve is steep and largely inelastic in the short run. Rising prices may provide incentives, but practical constraints such as technology, manpower, and mine capacity limit the ability of producers to scale output quickly.
Hosi also offered policy recommendations, urging the government to incentivize large-scale mining investments, maintain strategic reserves, and leverage Ghana’s position as Africa’s largest gold producer to support industrialisation and long-term economic resilience.
“Higher gold prices alone cannot explain Ghana’s recent production increase,” Hosi wrote. “Understanding supply inelasticity, smuggling dynamics, and policy interventions is critical for accurate economic analysis and decision-making.”
