Economist and finance analyst Senyo Hosi has cautioned that Ghana’s gold production cannot be assumed to rise simply because global prices are climbing, citing structural and regulatory constraints that limit output growth.

In a statement dated Wednesday, January 7, Mr Hosi observed that although gold prices reached record highs in 2025, Ghana’s large-scale mining production declined from about 104 metric tonnes in 2024 to roughly 101 metric tonnes in 2025.

He attributed the decline to the largely inelastic nature of gold supply, as well as operational bottlenecks and regulatory hurdles.

According to Mr Hosi, the conventional economic assumption that higher prices automatically lead to increased production does not always hold.

“Economics is often not a perfect maths,” he noted, drawing a parallel with rare commodities such as the 1945 Domaine de la Romanée-Conti wine, where scarcity means price increases have little effect on supply.

He explained that gold mining differs fundamentally from manufactured goods. The sector is both capital-intensive and labour-intensive, with most large-scale mines already operating close to full capacity.

As a result, even sharp price increases do not allow producers to ramp up output quickly. While artisanal and small-scale mining (ASM) operations are generally more adaptable, Mr Hosi said they faced significant regulatory restrictions in 2025, including limits on new concessions and tighter controls on the importation of mining equipment.

Mr Hosi also drew attention to the impact of smuggling on Ghana’s official gold production statistics. Citing analyses by SwissAid and UN COMTRADE, he argued that much of the reported increase in ASM production during 2025 reflected smuggled gold re-entering formal supply chains, rather than a direct production response to higher prices.

He credited government measures—such as GoldBod’s Domestic Gold Purchase Programme, stricter law enforcement, and the removal of withholding taxes—with helping to regularise the market and improve the accuracy of official production data.

Overall, Mr Hosi maintained that Ghana’s gold supply curve remains steep and largely inelastic in the short term. While elevated prices may strengthen incentives, constraints related to technology, skilled labour, and mine capacity continue to limit rapid expansion.

Looking ahead, he urged policymakers to focus on encouraging long-term investment in large-scale mining, maintaining strategic gold reserves, and leveraging Ghana’s status as Africa’s largest gold producer to drive industrialisation and economic resilience.

“Higher gold prices alone cannot explain Ghana’s recent production trends,” Mr Hosi concluded.

“A proper understanding of supply inelasticity, smuggling dynamics, and policy interventions is essential for sound economic analysis and effective decision-making.”