Ghana is considering scrapping long-term mining stability agreements while doubling royalties under sweeping new mining reforms.
According to the Acting Chief Executive Officer of the Minerals Commission, Isaac Tandoh, the changes are part of a broad overhaul aimed at balancing investor confidence with the government’s push to reap greater rewards from mining.
However, even before the announcement of the new royalty regime, mining companies in Ghana have been advocating for an increase in the share of mineral royalties returned to mining communities to 30% relative to less than 5% returned to the local assemblies in mining areas.
The Ghana Chamber of Mines, the body representing mining firms, has for some time been advocating that 30% of the royalties paid to the government be set aside for development in mining communities. It argues that, irrespective of the firms’ immense contribution to the development of these communities, the royalties meant for their development have been meagre, hence the poor state of development in these areas.
Data from the Ghana Chamber of Mines indicates that mining companies paid 35% in corporate tax to the Government of Ghana and a 3% Growth and Sustainability Levy. Based on the windfall from rising gold prices, their contribution to the fiscal economy was even higher in 2025. These payments signify the undisputed contribution of mining companies to the Ghanaian economy.
Between 2011 and 2024, mineral royalties contributed about 6.0 to 7.0% year-on-year to Ghana’s total tax on income and property. Nonetheless, it is shocking that, as a nation, we have failed to invest about GH¢20 billion in royalties to develop mining communities. Under the current mining regime, mineral royalties are paid into the Minerals Income Holding Account. The bulk, 78%, is transferred into the Consolidated Fund, while 2.0% goes into the Minerals Income Investment Fund. Twenty per cent is transferred into the Minerals Development Fund, which is distributed among stools, district assemblies in mining communities, and regulatory bodies.
Mining Firms’ Bailout of the Economy
Mining firms have bailed out the Ghanaian economy on numerous occasions during periods of economic headwinds. Episodes of fiscal instability have often culminated in the government introducing new levies for mining firms. In addition, the government, through regulatory bodies such as the Bank of Ghana, has negotiated with mining firms to retain portions of their earnings in the country for a period to ease foreign exchange pressures. This suggests a reactive approach. Actually, the Chamber’s members return more than 70% of their proceeds to Ghana. We can highlight the Chamber’s gold sales to BoG as part of the bail out measures.
These and many other factors suggest that any proposed review of the Minerals and Mining Act should be a win-win for both the Government of Ghana and mining firms. Failure to achieve this balance may deter potential investors from considering Ghana or compel existing firms to relocate. Importantly, other countries are discovering mineral deposits in abundant quantities, giving firms alternative destinations where their investments can be better protected. Some of these countries are also offering enhanced stability agreements.
The Chamber recently reiterated its commitment to partnering with the Government of Ghana to maximise returns from mineral resources for Ghanaians. It emphasised that it does not oppose efforts to increase state revenue but believes the proposed measures fail to strike the right balance between higher returns and sustained industry growth. This is a carefully considered position, as the Chamber’s longstanding argument has focused on developing mining communities to levels comparable to Johannesburg and other global mining hubs. A deliberate government strategy is needed to transform mining communities into specialised industrial towns or megacities, creating opportunities for residents—particularly the youth—after the life of the mine has ended.
Accountability of Mining Revenue
The mining industry’s contribution to the Ghanaian economy has been impressive year-on-year. The acquisition of gold by the Bank of Ghana as a safe haven against future shocks demonstrates the importance of mining to the economy. Both the fiscal and monetary sectors have benefited immensely. For example, gold reserves held by the Bank of Ghana have cushioned the Ghana cedi against shocks, ultimately strengthening it against the US dollar. Indeed, the cedi ended 2025 as one of the best-performing currencies in the world.
Mining firms have created numerous employment opportunities and granted appreciable concessions to the communities in which they operate. They have also implemented alternative livelihood programmes to ensure that residents have other income options when the life of the mine is over. In summary, the mining companies’ contributions through taxes (corporate, stability, income, etc.), royalties, and other payments are significant.
According to the Bank of Ghana’s January 2025 Summary of Economic and Financial Data, gold earnings for 2025 stood at US$20 billion, compared to US$10.3 billion in 2024. This underscores the significant gains from the precious metal. It is therefore incumbent on all stakeholders—civil society, religious groups, and others—to monitor and track the revenue performance of the mining sector. This will help ensure that government utilises mining revenues judiciously for the betterment of mining communities, the people, and the country.
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Source: www.myjoyonline.com