Ghana's position as West Africa's leading gold producer is under threat as mining companies redirect investments to neighboring countries offering more favorable tax structures, raising concerns about job losses and economic stability in communities dependent on the industry. Ken Ashigbey, CEO of the Ghana Chamber of Mines, warned Thursday on Joy News' PM Express Business Edition that the country's current mining tax structure is driving capital flight at a critical moment when regional competitors are aggressively courting the same investors.
The warning comes as Ghana operates at the upper limit of the International Monetary Fund's recommended range for sharing mining profits between governments and investors. "The upper limit is what we are hitting," Ashigbey said, noting that some mining firms are already under pressure because of high operating costs and low-grade mines. When gold prices fall, the government's share of mining revenues could exceed 60%, creating an unsustainable burden on operators and threatening the livelihoods of workers in mining-dependent regions.
Investment Flight to Neighboring Countries
The fiscal pressure is already producing tangible consequences. Ashigbey disclosed that one mining company recently redirected funds intended for projects in Ghana to Côte d'Ivoire due to Ghana's fiscal regime. "The money moved into Côte d'Ivoire due to the fiscal regime that is not friendly, especially the royalty," he revealed. The shift represents not just lost capital but lost employment opportunities and reduced tax revenue for communities that depend on mining activity.
He criticized the increase in royalty rates from 5% to between 5% and 12%, saying it has significantly raised production costs for mining firms. "What you have done is that you've added an additional cost to the production of these mining firms," he said. For workers and local businesses that supply the mining sector, higher costs translate directly into reduced hiring and economic contraction.
Regional Competition Intensifies
Ashigbey warned that competing for investment is becoming harder as neighboring countries adopt strategies Ghana once used to attract capital. "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," he stated. Côte d'Ivoire has set an explicit goal: "Their objective is that in the next 10 years they want to be the leading producer of gold in Africa," Ashigbey said. "It means they want to take over from us in Ghana."
The competitive threat is not theoretical. Ashigbey cited mining giant Endeavour as one example of a company that shifted focus from Ghana to Côte d'Ivoire, where major gold discoveries were recorded last year. He also warned that Guinea is emerging strongly in the mining space, noting that geological advantages are not unique to Ghana. "The geology is not restricted to Ghana," he stressed.
Democratic Advantage Eroding
Ashigbey noted that Ghana's stable democracy and incentives under Act 703 previously helped attract investors. However, he said neighbouring countries are quickly adopting similar strategies and becoming more competitive. The implication is clear: democratic stability alone cannot sustain Ghana's mining sector if fiscal policy makes operations unviable. For workers who have built careers in the industry and communities where mining provides essential economic activity, the erosion of Ghana's competitive position threatens widespread economic hardship.
Ashigbey called on government to urgently reconsider the country's fiscal policies to avoid losing more mining investments to competing destinations across West Africa. The appeal reflects growing concern within the industry that without policy adjustment, Ghana will see not just reduced investment but actual capital departure, with all the job losses and community impacts that entails.
Why This Matters:
Ghana's mining sector employs thousands of workers directly and supports tens of thousands more through supply chains and local businesses in mining communities. When investment flows to neighboring countries due to tax policy, it is not abstract capital that moves—it is jobs, wages, and economic opportunity for families who depend on the industry. The government faces a difficult balance: extracting fair revenue from natural resources to fund public services while maintaining a competitive environment that preserves employment and economic activity in mining regions. As regional competitors actively court the same investors with lower tax burdens, Ghana's policy choices will determine whether communities continue to benefit from gold production or watch economic opportunity migrate across borders, leaving workers and local economies to bear the cost of fiscal decisions made in the capital.