Ghana’s Mining Attracts Investment Of US$16 Billion

Statistics available has shown that, Ghana’s mining sector direct investment since 1983 till date amounts to a little of overUS$16 billion cumulatively. This is made up both foreign and domestic direct investment.

The statistics further depicts that, investment inflow into the mining sector from 2000 to 2015 stood above US$10 billion.

It is no doubt that as at now, the mining sector is the country’s leading source of Foreign Direct Investment (FDI).

Records from the Minerals Commission further show that FDI inflow into the mining sector in 2015 was US$965 million.

Figures available indicates that, gold production increased by 93 per cent from 2.24 million ounces in 2002 to over 4.3 million ounces in 2014.

However, in 2015, there was a significant reduction to 3.63 million ounces due to declining metal prices among others.

Despite the reduction in gold production in 2015, Ghana still maintained its position as the second largest producer of Gold in Africa and ninth in the World.

In terms of revenue to government in the form of taxes, levies and fees, the sector contributed 27 per cent of revenue in 2012, which was collected by the Domestic Tax Division of the Ghana Revenue Authority, 18 per cent in 2013 and 14 per cent in 2015, and provided an average of 40 percent of total merchandise export earnings over the last 10 years.

Similarly, the Chief Executive Officer (CEO) of the Ghana Chamber of Mines, Mr. SulemanuKoney, has hinted that the mining sector is a leading tax payer and contributor to the Ghana Revenue Authority’s (GRA’s) domestic collections in recent years.

He disclosed that the sector alone contributed about GHC1.35 billion to GRA, representing 14.8% of GRA’s total direct taxes in 2015.

He said corporate tax stood at GH¢463.12 million with mineral royalties at GH¢485.6 million while pay as you earn (PAYE) raked in GH¢ 404.74 million and other taxes at GH¢0.87 million.

He added that the industry 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.

According to him, producing members of the chamber returned USD3.1 billion representing 85% of their mineral revenue (US$3.1 billion) through Bank of Ghana and the commercial banks in 2015, a situation which has significant bearing on the international reserve position of BoG and the stability of the monetary system as a whole.

Further analysis of the information available indicates that, about 22,000 people were employed for large-scale mining; while it is estimated that over one million people were engaged for small scale mining in 2015.

Commenting on the performance and contributions of the mining sector to Africans economy, MrNiiOsah Mills, Minister of Lands and Natural Resourceshas said the perception that African countries had not benefited enough from the exploitation of their mineral resources stemmed from the fact that the continent still exports most of its mineral resources in the raw state.

Additional to the challenge, had been the limited linkage development of the mining sector with the rest of the economy.

Mr. Mills is therefore urging stakeholders to help identify additional challenges and suggest ways that could be used to address the gaps.

But, Dr. Abdul-Rashid Hassan Pelpuo, Minister of State at the Office of the President in Charge of Private Sector Development and Public Private Partnership (PPP), said the mining sector had the potential to increase the economy, but warned that its exploitation should be done without jeopardizing the environment, especially water bodies, which could cause health risk to the population.

He is therefore calling for implementation and enforcement of mining and environmental related laws to safeguard the exploitation of the mining sector and the environment from abused by citizens and foreigners.

Dr. Pelpuohas urged institutions responsible for the enforcement of laws to read the laws thoroughly and be abreast with them for appropriate enforcement to deter offenders.

Other stakeholders have also alluded that, one of the greatest challenges facing Ghana’s mining industry had been the sustainable exploitation of the mineral resource within the framework of environmental integrity and social concerns.

They, however, have asserted that for the mining sector to make any meaningful contribution to sustainable development, it was important to ensure that the exploitation was done in a humane and environmental friendly manner devoid of violating any of the laws and regulations governing the operations of mining in Ghana.

However, Mr. Koney is worried that, environmental destruction by illegal miners which mars the image of the entire minerals industry, including properly regulated large scale mining firms as a challenge to the sector. Others are that it imposes significant avoidable cost on duly registered mining companies.

He further raised concerns that, abandoned pits are a potential cause of death of host community members; bequeaths community members, companies and state with rehabilitative costs; deprives the state and community of rent since the operatives are not tax liable; destroys aquatic life and increases cost of treating potable water; threat to potable water availability and threat to production of food and cash crops as major challenges.