There is no doubt that Ghana’s new sliding-scale gold royalty regime could significantly boost government revenue when global gold prices surge, but comparisons with other African mining jurisdictions raise questions about competitiveness.
Under the new proposed framework, royalties paid by mining companies in Ghana would rise in line with international gold prices.
An analysis by C-NERGY’s latest Thought Leadership Series breaks it down that when prices are below $1,900 per ounce, companies would pay 5 percent. The rate would increase gradually as prices climb, reaching 12 percent if gold prices exceed $4,500 per ounce.
The new regime marks a shift from Ghana’s current flat royalty structure and is intended to ensure that the state captures a larger share of windfall profits when mining companies benefit from rising bullion prices.
Despite the huge revenue potential of the new regime, industry players and some analysts have raised questions about the competitiveness of the regime. The Ghana Chamber of Mines, although it is not opposed to the sliding scale, has raised concerns about the range.
The Chamber says the proposed upper limits risk harming mine sustainability, investment, and even Ghanaian-owned mining projects. Instead of 5% to 12% range, the chamber proposed a lower band of 4% to 8%.
How then does the new regime compare to African peers?
Comparing Ghana with its African Peers
C-NERGY’s comparison with leading gold-producing countries across the continent shows that the proposed regime places Ghana ahead of its peers.
Specifically, within the broader range of African royalty frameworks, Ghana’s upper band makes the regime higher than some competitors.
For instance, in Mali, royalties typically range between 3% and 10%, depending on the mining contract and price conditions.
Also, neighboring Burkina Faso applies royalties generally between 3% and 5%, making its fiscal terms comparatively lighter.
In South Africa, royalty rates vary between 0.5% and 7%, based on profitability and revenue.
Meanwhile, Sudan applies royalties between 5% and 7%.
These comparisons suggest that while Ghana’s proposed maximum rate of 12 percent is higher than most peers, the lower tiers of the sliding scale remain broadly aligned with the region’s fiscal norms.
Revenue Upside During Price Booms
The primary objective of the reform is to allow the government to capture a larger share of revenues during periods of exceptionally high gold prices.
Gold prices have surged in recent years amid global economic uncertainty and geopolitical tensions. In such an environment, a sliding-scale royalty system ensures that the state benefits more directly from the boom.
If bullion prices continue to climb, the higher royalty tiers could translate into hundreds of millions of dollars in additional annual revenue for the government.
This revenue boost could support critical public spending in infrastructure, healthcare, and education, while also strengthening fiscal buffers.
Striking a Balance Between Revenue and Competitiveness
Given the fiscal burden that the new regime places on the mining companies, which are mostly foreign, the home countries of these companies, such as the United States, Australia, and others, have raised concerns.
This brings the concern of striking a balance between maximizing national benefit from its mineral resources and maintaining an attractive investment climate.
If royalty rates are perceived as too high, mining companies may shift exploration and investment toward countries with lower fiscal burdens.
However, analysts note that Ghana retains several advantages that continue to attract investors, including political stability, an established mining ecosystem, and strong geological potential.
For this reason, some experts argue that the sliding-scale structure could represent a middle ground by protecting government revenue during price booms while keeping the country competitive during periods of lower gold prices.
