This, in essence, opens greater opportunities for Ghanaians to participate in the extractives sector.
But Ghana’s failure to add value to gold locally has been described as a bane to deriving maximum benefit from the mining industry.
It has emerged that nothing by way of local content would change in the extractive industry if Ghana continues to take its mineral royalties in cash instead of raw gold.
“In the oil sector, royalties and other tax payments are computed and they give us crude oil and we decide what to do with our crude oil; in the mining sector, they [the mining firms] go and sell. Infact some of them go and sell in dollars and come and give us cedis…are we allergic to dollars?” quizzed Dr. Steve Manteaw, a member of the Ghana Extractives Industries Transparency Initiative (GHEITI).
He suggests a shift from the extreme focus on revenue to benefit maximization in natural resource management.
Revenue streams from the mining sector to the national budget include mineral right fees, ground rent, property rate, mineral royalty, dividends and corporate tax.
At a time the Ghanaian economic is challenged in stemming the tide of the cedi depreciation against the US dollar and other foreign currencies, Dr. Manteaw says the fiscal regime should not encourage foreign exchange flight.
“We need to make the necessary policy decisions to tighten up and make it difficult if not impossible for foreign exchange to leave this country,” he stated.
Gold accounts for around 90 percent of total mineral output in Ghana – production climbed to record 4.3million ounces in 2012. Though prices have slumped globally, the gold mining sector continues to rake in billions of dollars every year.
Gold is a commodity in demand – generally used for fabrication or investment. Fabricated gold has a variety of end-uses, including jewelry, electronics, dentistry, industrial and decorative uses.
Dr. Steve Manteaw says adding value to raw gold locally will create employment and increase revenue to the State.
“This country will be exporting jewelry and not gold bars for which we get pittance; you get more for jewelry and by doing that you’ll be creating tax opportunities, Ghanaians will be employed in the jewelry making industry, they will pay taxes and this can be used to finance our national development,” he noted.
Ghana is Africa’s second and world’s 10th largest producer of gold.
Story by Kofi Adu Domfeh