The mining sector has contributed GH¢34.579 billion to the country’s Gross Domestic Product (GDP) from 2020 to 2022.
The sector declined from GH¢11.449 billion in 2020 to GH¢10.105 billion in 2021, representing a decrease of 11.7 percent and increased to GH¢13.025 billion in 2022, representing a 28.9 percent climb.
This was contained in the Ghana Extractive Industry Transparency Initiative (GHEITI) report for mining, oil and gas, launched on Wednesday, July 24, 2024 in Accra.
The publication brings to 29, the total number of reports published since Ghana acceded to the initiative, made up of 18 mining and 11 oil and gas reports.
The report also revealed that in 2021, the country’s gold production shrunk by 91.7 percent, mainly due to the introduction of a 3 percent withholding tax on small-scale production of unprocessed precious minerals.
The government’s decision to half the rate of the impost, from 3 percent to 1.5 percent, spurred a recovery reflected in the 569-percentage increase in official records on the small-scale sector’s output in 2022.
Relative to the other sectors, the mining sector was the fifth largest economic activity by value in 2021 and the third in 2022.
Mineral export proceeds in 2021 and 2022 represent 36 percent and 39 percent of total merchandise exports respectively, which were more than the contributions of the other major forex earners, such as cocoa and crude oil.
Oil and Gas
On oil and gas, the upstream oil and gas sector contributed 4.89 percent to the Gross Domestic Product (GDP) of Ghana, 6.91 percent of total government revenue and 7.03 percent of domestic revenues in 2021.
The report also indicated that a total of 11,615,029 bbls of crude oil was exported by GNPC in respect of CAPI and royalties for an amount of US$496,286, 197.87.
Moreover, the other partners exported 55,843,177 bbls of crude in 2022. Thus, the total crude oil exports for 2022 as reported by the Bank of Ghana was 67,458,206 bbls valued at US$2,910.6 million. This translates into 31.19 percent of total merchandise exports in 2022.
In 2021, the total value of crude oil export was US$3,947.73million which accounted for 26.81 percent of gross merchandise exports
Recommendations
The report also recommended transparency in the operations of Minerals Income Investment Fund (MIIF).
Per the report, as a sovereign wealth fund, MIlF has the potential to catalyse national development through investments in the mining sector, with emphasis on forward and backward linkages.
Similarly, MIlF’s investments in gold mining, lithium and solar salt production could lead to greater value retention for the country.
However, the criteria for identifying or selecting a private sector partner is not publicly available, and the selection process is not open to public scrutiny.
To avoid the risk of state capture and cronyism, GHEITI urges MIlF to open up its processes for identifying or selecting partners in whose businesses it invests its resources.
As much as possible the processes must be open and competitive, and where support for small-scale operators is concerned, the over-riding consideration should be, those whose operations are formalised, meet all statutory obligations, and upholding the highest sustainability standards. That way, the Fund will be helping to raise role models for others to emulate.
