Mining capital, represented by Ken Ashigbey, CEO of the Ghana Chamber of Mines, has issued a direct warning that Ghana risks losing its position in gold production as mining investors increasingly turn to other West African countries. Ashigbey, speaking on Joy News’ PM Express Business Edition one day ago, argued that Ghana's current mining tax structure is making the country less attractive to investors. He stated that regional competition for mining capital is intensifying.
Ashigbey claimed that Ghana is already operating 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,” he stated. He warned that some mining firms are already under pressure due to high operating costs and low-grade mines. According to Ashigbey, this situation becomes worse when gold prices fall, as the government’s share of mining revenues could then exceed 60%.
Capital's Demands for Surplus Extraction
Ashigbey articulated the logic of capital flight, stating, “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 disclosed that one mining company recently redirected funds intended for projects in Ghana to Côte d’Ivoire. This redirection was attributed to Ghana’s fiscal regime, which was deemed "not friendly," especially concerning royalty rates.
The CEO of the Ghana Chamber of Mines criticized the increase in royalty rates from 5% to between 5% and 12%. He argued that this increase 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,” Ashigbey said. This pressure from mining capital seeks to reduce the state's share of the extracted surplus value.
The State Under Pressure: A Race to the Bottom
Ghana’s stable democracy and incentives under Act 703 previously helped attract investors, Ashigbey noted. However, he stated that neighboring countries are quickly adopting similar strategies and becoming more competitive in attracting mining capital. He pointed to Côte d’Ivoire’s growing ambitions in the mining sector. “Their objective is that in the next 10 years they want to be the leading producer of gold in Africa,” Ashigbey said, adding, “It means they want to take over from us in Ghana.”
Mining giant Endeavour was cited as an example of a company that shifted its focus from Ghana to Côte d’Ivoire, where major gold discoveries were recorded last year. Ashigbey also warned that Guinea is emerging strongly in the mining space, emphasizing that geological advantages are not unique to Ghana. “The geology is not restricted to Ghana,” he stressed. This intensifying competition among states to offer more favorable terms to transnational corporations drives a race to the bottom in fiscal regimes.
Ashigbey called on the government to urgently reconsider the country’s fiscal policies. This demand aims to prevent further capital flight and ensure that Ghana's state apparatus continues to facilitate maximum surplus extraction for mining investors, rather than securing a greater share of the nation's mineral wealth for its populace.