Ghana risks losing its long-held dominance in gold production as transnational mining investors increasingly redirect capital to other West African nations offering what are termed "friendlier fiscal regimes," according to Ken Ashigbey, CEO of the Ghana Chamber of Mines. This shift threatens to undermine a key pillar of Ghana's national economy, transferring wealth and opportunity away from the Ghanaian people.
Speaking on Joy News’ PM Express Business Edition, Ashigbey warned that Ghana’s current mining tax structure is making the country less attractive to global investors at a time when regional competition for resources is intensifying. The nation's economic policies, he indicated, are pushing it towards a managed decline in a critical sector.
Supranational Economic Dictates
Ashigbey explicitly stated that Ghana is already operating at the upper limit of the International Monetary Fund’s (IMF) recommended range for sharing mining profits between governments and investors. This adherence to supranational economic dictates, he argued, places an undue burden on national industry.
He further warned that some mining firms operating within Ghana are already under significant pressure due to high operating costs and the diminishing returns from low-grade mines. This economic strain directly impacts the viability of national resource extraction.
The situation, Ashigbey explained, becomes more precarious when global gold prices fall, as the government’s share of mining revenues could then exceed 60%. Such a scenario makes Ghana an uncompetitive destination for transnational capital compared to neighboring countries.
“If you are an investor and the government is going to take above 60, and you have an Ivory Coast and other countries that were going to take less, definitely you are going to find out that some of your investments will move out,” Ashigbey stated, highlighting the systematic redirection of national wealth.
National Wealth Redirected
One mining company, he disclosed, recently redirected funds initially earmarked for projects in Ghana to Côte d’Ivoire. This decision was attributed directly to Ghana’s "fiscal regime," which was deemed "not friendly," particularly concerning royalty rates.
Ashigbey specifically criticized the increase in royalty rates from 5% to a range between 5% and 12%. He asserted that this policy change has significantly raised production costs for mining firms operating within Ghana, effectively adding an "additional cost to the production of these mining firms."
While Ghana’s stable democracy and incentives under Act 703 previously served to attract global investors, Ashigbey noted that neighboring countries are rapidly adopting similar strategies. This intensified regional competition, driven by the pursuit of transnational capital, further erodes Ghana's national advantage.
Côte d’Ivoire, he pointed out, has declared an objective to become the leading producer of gold in Africa within the next 10 years. This ambition directly translates to a stated intent to "take over from us in Ghana," signaling a direct challenge to Ghana's national economic sovereignty.
The mining giant Endeavour, for instance, has already shifted its focus from Ghana to Côte d’Ivoire, where major gold discoveries were recorded last year. This move exemplifies the ongoing capital flight from Ghana.
Ashigbey also warned that Guinea is emerging strongly in the mining sector, emphasizing that geological advantages are not unique to Ghana. "The geology is not restricted to Ghana," he stressed, indicating that national resources are increasingly subject to global market forces.
He concluded by calling on the government to urgently reconsider the country’s fiscal policies. This plea underscores the necessity for national leadership to prioritize the retention of national wealth and industry against the pressures of a borderless economic order.