Ghana’s budding mining industry, which has earned the country an enviable spot among the top gold producing countries on the continent, risks being overtaken by her neighbours in the Sub-region, including Cote d’Ivoire and Burkina Faso, due to lack of investment into her green-field exploration projects.
With this current setback in the green-field exploration projects, it is feared that the competitiveness of the mining sector, which is dependent on these activities, could be lost to some of these West African countries which have strongly begun harnessing their mineral resources.
For instance, presently, reforms in the mineral code of Burkina Faso have positioned the country as a significant site for exploration in Africa while Cote d‘Ivoire’s revised mining code has also been hailed as the “game changer” on the continent.
Although Ghana is ranked second highest gold producing country in Africa, despite recording 2,850,585 ounce of gold, in 2015, representing 10 percent drop in gold production from 3,167,755 ounce, in 2014, according to the Ghana Chamber of Mines Cote d’Ivoire has outperformed Ghana in terms of green field projects.
But in the wake of these developments, the Chief Executive Officer (CEO) of the Ghana Chamber of Mines, Mr. Sulemanu Koney, said while the situation is worrying Ghana will have to reposition itself to maintain its pre-eminent position.
He explained that the future of the country’s mining industry hangs on her green-field exploration activities, and in view of this, noted that more investment will be required in this area to give assurance of the pipeline of mining projects coming on-stream in the future.
To this end, he noted that the Chamber of Mines is engaging key stakeholders including the Minerals Commission as part of efforts to address this ‘looming threat’ to the industry.
‘Sector Importance’
The mining industry is the leading tax payer and major contributor to Ghana Revenue Authority’s domestic collections in recent years.
It contributed about GH?1.35 billion to GRA, representing 14.8% of its total direct taxes in 2015.
It also accounted for 31% of the country’s gross export revenue in 2015, reinforcing its position as the leading source for forex and a major contributor to the country’s balance of payments.
The sector is currently the country’s leading source of Foreign Direct Investment (FDI). Data from the Minerals Commission show that foreign direct investment (FDI) inflow into the mining sector in 2014 was US$ 950 million. Cumulatively, the investment inflow into the sector from 2000 to 2014 stood above US$ 8 billion.
It is estimated that the mining industry employed about 9,939 people directly in 2015; of which 177, representing 2% were expatriates.
Empirical evidence suggests that the number of indirect and induced jobs created by mining is about fifteen (15) times the number of direct employees (SRQ and ACET, 2015).
However, despite these enormous contributions to the development local economy, the mining sector is faced with a number of challenges including a strict fiscal tax regime, menace of galamsey operations on mining concessions, increasing utility and energy charges among others.
Among a number of recommendations to address the situation, at the backdrop of the annual stakeholder engagement, in Kumasi, Mr. Koney, called for the promulgation of a Mineral Revenue Management Act.
He said the passing of a Mineral Management Revenue Act akin to the Petroleum Revenue Act will help to track the utilization of mineral revenue in the country.
He observed that mineral revenue is finite and it is not too healthy to be just consumed as has been done over the years in the country, but given that it is finite its utilization should be strategic, is able to be monitored, and showcase what it has been used for.
He noted that talks are ongoing with the Ministry of Finance and Economic Planning, Minerals Commission and other stakeholders to ensure that this is realized.
There was also a call for the increase in the mineral royalties from government to local mining communities from 9 percent to 30 percent given the percentage of royalties which goes to government and the percentage benefitted by mining communities for development.