What’s wrong with Ghana’s mining sector?
Often seen as a governance model in the mining sector, Ghana is now in the midst of an unprecedented internal crisis. Should this trend continue in the coming months, the economic fallout could be devastating and could cause Ghana to lose its dominant position as one of the continent’s mining hotspot. Indeed, we are talking about a booming sector whose revenues reached GHS 4.0 billion in 2019 (about US$700 million), amounting to about 8.7% of the state’s tax revenues. If such revenues represent a substantial financial lever for the country, it also attracts the attention of potentially corrupt national and international actors.
Political interference
According to The Minerals Commission Act 1993 (Act 450), the Minerals Commission is responsible for regulating and managing the utilisation of Ghana’s mineral resources, in addition to coordinating and implementing policies related to mining. It is presumed to do so in tight collaboration with the Land and Natural Resources Ministry, to secure optimal management of Ghana’s resources. The cooperation between the regulator and the ministry may appear to be effective in theory, it is less so in practice. Repeatedly, the opaque collaboration between the ministry and the regulator has been seen as a sign of political interference by foreign operators, some of which have started to voice their concerns over issues of misgovernance and lack of transparency.
With consequences
The special relationship between the Minerals Commission, and the Land and Natural Resources Ministry could account for the departure of Natural Resources Minister Kwaku Asomah-Cheremeh during the last cabinet shuffle. While President Nana Akufo-Addo initially seemed to want to keep his minister, media exposure and repeated scandals led the President to eventually appoint Samuel Abdulai Jinapor as his replacement.
While these adjustments respond to the strategy of the authorities to preserve a good image of the Ghanaian mining market among international investors, the country needs a genuine structural transformation. These forms of misgovernance are not new, and already in 2017, an analytical study published by scholars Gordon Crawford and Gabriel Botchwey pinpointed the collusion of authorities and their corrupt practices in mining management. The report, entitled Conflict, collusion and corruption in small-scale gold mining: Chinese miners and the state in Ghana, relied on the country’s management to denounce that too often, “public office remains a means of private enrichment rather than public service”.
The year 2020 stood out in the media for a whole series of controversial business deals made by the Government, in which suspicions of bribery are high; the mining sector was no exception with the Agyapa Royalties Deal that led to the resignation of the Special Prosecutor.
Kwame Owusu Danso
Broadcast – Journalist
Panafrican Television
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