By Adnan Adams Mohammed
The Ghana Chamber of Mines (GCM) is pushing back against “punitive” government tax hikes, proposing instead a flexible 4 to 8 percent sliding royalty regime to ensure the industry remains viable when the market eventually cools.
The proposal, submitted to the government this week, seeks to replace the current fixed royalty and levy structure with a more dynamic model. Central to the Chamber’s pitch is the removal of the 1% to 3% Growth and Sustainability Levy (GSL), which mining firms argue is a “double-tax” on production that hampers reinvestment.
This comes at a time when global gold prices are shattering records above US$5,300 per ounce.
The Chamber CEO, Ken Ashigbey, speaking during a TV discussion cautioned policymakers against what he termed an “Esau mentality” trading long-term industrial stability for a short-term revenue “mess of pottage.”
“Eating on a constant and continual basis is better than eating one large meal once,” Ashigbey noted, referring to the government’s recent move to push royalty rates as high as 12% in some draft legislative instruments. “This price phenomenon is short-term. You don’t take decisions that are long-term in nature just based on a temporary surge.”
The Proposed Fiscal Shift
The Chamber’s counter-proposal is designed to be “equitable,” allowing the state to capture windfalls during booms while protecting mines from closure during price slumps.
Feature Current/Govt Proposal Chamber’s Counter-Proposal
Royalty Rate 5% to 12% (Sliding) 4% to 8% (Sliding)
GSL 1% (on production) Abolish
Community Dev. Varies 1% of Net Profit (New Fund)
Price Floor N/A 4% Royalty if gold hits ~$1,900
Investing the Windfall: Agriculture and Reserves
Beyond the tax rates, the Chamber is calling for a radical rethink of how the state spends its mining revenue. Mr. Ashigbey urged the government to resist the temptation to spend the current windfall on immediate consumption. Instead, he proposed:
● The Minerals Revenue Management Act: A new legal framework to mandate the channeling of mining proceeds into a Stabilisation Fund.
● Commercial Agriculture: Using mining gains to “oil” other sectors, specifically large-scale farming, to ensure economic growth continues even after the gold is gone.
● Community Visibility: The proposed 1% net-profit contribution would go into a dedicated fund so mining communities can point to specific, tangible projects funded by the gold boom.
Including the “Small-Scale” Giants
The Chamber also highlighted a significant shift in production dynamics: the small-scale mining sector now produces more than half of what the large-scale sector generates. Ashigbey argued that formalizing and properly taxing this sector is critical to national revenue.
“When the percentages are right, they [small-scale miners] would also be able to put a bit into the kitty,” he said, suggesting that a fair, predictable rate would encourage formalization rather than evasion.
A Crossroads for the Cedi
The call for a Minerals Revenue Management Act comes at a time when Ghana’s macroeconomic stability including the strength of the Cedi and easing inflation remains heavily “predicated on commodity prices.”
“Tomorrow, when things are not good, you need to be able to recover,” Ashigbey warned. “For us, in the short term, everything looks very good, but we need to be thinking about the medium term.”
