Proposed mining royalty regime could cost Ghana nearly one million jobs – Patrick Boamah

The Chairman of Parliament’s Subsidiary Legislation Committee, Patrick Yaw Boamah, has warned that the proposed sliding-scale royalty regime in Ghana’s mining sector could lead to close to one million job losses if it discourages investment in the industry.

According to him, the policy risks undermining expected investment flows into the sector, which could ultimately affect employment levels and reduce government revenue.

Speaking in Parliament on March 10, Mr Boamah said Ghana is expecting about $7 billion in mining investment between the past five years and 2028, which is anticipated to support local companies and strengthen local content within the sector.

However, he cautioned that introducing the new royalty framework could jeopardise these gains.

“If you introduce this sliding scale, yes, you may accrue some revenue, but the net effect will be some job losses that I’ll be sharing with you in the report I’ve given to you — close to a million jobs,” he said.

He warned that such large-scale job losses would have far-reaching economic implications.

“If you lose close to a million jobs because the investment required did not come in, you are not going to get the employee tax, employees’ tax, tax from companies and what have you,” he stated.

The Minority in Parliament has therefore cautioned the government against implementing the new royalty regime without introducing measures to cushion mining companies.

They argue that the government should honour its promise to reduce the Growth and Stabilisation Levy from 3% to 1% in order to ease the financial burden on mining firms.

Mr Boamah said he has conducted checks and there is currently no proposal before Parliament seeking to reduce the levy as previously promised.

“As we speak, there’s nothing before Parliament. I’ve done my research, I’ve spoken to key government people… there’s nothing like that on the floor,” he said.

He warned that failure to honour such commitments could undermine investor confidence, particularly among multinational mining companies operating in the country.

According to him, such companies regularly report developments in Ghana to their global headquarters and could redirect investments to other countries if the fiscal environment becomes less attractive.

“They will not take us seriously because to the best of their knowledge, this is not the right framework to attract investment. So they will start looking elsewhere. That is my worry,” he added.

Mr Boamah also referenced growing international interest in the debate surrounding Ghana’s proposed mining fiscal regime.

He noted that major global players are monitoring developments closely, citing commentary suggesting that global powers including China and the United States are paying attention to the proposed changes to Ghana’s gold royalty framework.

According to him, Chinese companies have already expanded their footprint in Ghana’s mining sector, including involvement in operations linked to the Newmont Akyem Mine and other projects across the country.

“If the big major players or the big economies are talking about this regime, then government has to look at it carefully,” he said.

Mr Boamah stressed that Ghana must strike a careful balance between protecting state revenue and maintaining an attractive investment climate for companies operating in high-risk sectors such as mining and oil.

“Ghana is not an island. You protect your business interest and your revenue, but you should always remember that resources are being discovered in many countries,” he noted.

He added that companies could easily redirect investments to jurisdictions offering more favourable terms if Ghana’s fiscal policies become too restrictive.

Meanwhile, the Ghana Chamber of Mines has also raised concerns about the proposed royalty framework.

According to the Chamber, increasing mineral royalty rates from 5% to about 11% or 12% could render some mining investments uneconomic.

The industry body estimates that the policy could lead to about 1,344 direct job losses, with 88% of those expected to come from host mining communities.

It also warned that the change could result in foregone government revenues of about US$228 million in royalties and US$604 million in corporate income tax, as well as a reduction in local procurement spending exceeding US$1.7 billion over time.

Mr Boamah therefore urged the government to review the policy carefully and honour its earlier commitment to reduce the Growth and Stabilisation Levy in order to cushion mining companies.

“Government should honour their promise of reducing the Growth and Stabilisation Levy from 3% to 1% to balance the hardship on the companies,” he said.

DISCLAIMER: The Views, Comments, Opinions, Contributions and Statements made by Readers and Contributors on this platform do not necessarily represent the views or policy of Multimedia Group Limited.

DISCLAIMER: The Views, Comments, Opinions, Contributions and Statements made by Readers and Contributors on this platform do not necessarily represent the views or policy of Multimedia Group Limited.