The Ghana Chamber of Mines (GCM) is calling for a legal backing on the expenditure of mineral revenues in the country.
According to the chamber, government must formulate a law that will protect or guide the expenditure of mineral revenues in the country, similar to the Petroleum Revenue Management Act, 2011 (Act 815) and its amendment (Act 893) to mitigate the macroeconomic challenges with oil revenues.
The Chief Executive Officer (CEO) of the Chamber, Mr. Sulemanu Koney, told the Daily Express that minerals, like other extractive resources, are finite and their prices are externally determined, which makes it susceptible to shocks.
“The cyclical behaviour of mineral prices and exhaustibility of mineral resources pose a major challenge to mineral dependent economies such as Ghana with respect to sustainable development,” he stated.
He mentioned that the shocks to price directly affect revenues declared by mining companies and imposts paid to authorities as well as sub-national transfers.
“In order to smoothen the expenditure of inflows from resources that are finite and exhibit price volatility, most matured economies enact fiscal laws to govern the use of natural resource revenues.”
“For the first time since 2011, the provisional balance of payments in 2016 recorded a surplus. This largely reflected an improvement in the trade balance driven by a rise in gold export receipts and a fall in oil import prices,” Monetary Policy Committee (MPC) report, January, 2017.
The 2016 annual report of the chamber indicated that producing members of the chamber returned US$2.3 billion, representing 71% of their mineral revenue (US%3.2 billion) through the Bank of Ghana (BoG) and the Commercial Banks in 2016.
This has significant bearing on the international reserve position of BoG and the stability of the monetary system as a whole.
The mining sector employed about 11,628 people directly in 2016; of which 190, representing 1.63% were expatriates.The legislative framework for mining in Ghana is currently laid down in the Minerals and Mining Act, 2006 (Act 703).
The Section 1, Act 703, stipulates that: “Every mineral in its natural state in, under or upon land in Ghana, rivers, streams, water-courses throughout the country, the exclusive economic zone and an area covered by the territorial sea or continental shelf is the property of the Republic and is vested in the President in trust for the people of Ghana”. Looking at the 2016 Public Interest and Accountability Committee (PIAC) report, Ghana received a little over US$247.18 million in 2016 from oil revenue, the lowest amount since Ghana began commercial production of oil in 2011.