Persistent delays, weak enforcement of existing laws, and governance gaps are undermining Ghana’s ability to translate mineral wealth into tangible development for mining communities, stakeholders have warned.
The concerns emerged at an engagement organised by the Natural Resource Governance Institute (NRGI) in collaboration with the Centre for Extractives and Development Africa (CEDA), focusing on governance and disbursement of mineral royalties under the Minerals Development Fund (MDF).
Legal framework strong, implementation weak
Ghana’s mineral royalty-sharing framework, formalised under the Minerals Development Fund Act, 2016 (Act 912), was designed to ensure predictable and transparent distribution of mining revenues to host communities.
The law allocates 20 percent of mineral royalties to the MDF, with clear timelines requiring funds to be transferred within six working days.
However, nearly a decade after its passage, implementation gaps persist.
Stakeholders noted that transfers remain inconsistent and unpredictable, with historical arrears running into hundreds of millions of cedis. In some instances, even when funds reach the MDF, onward disbursement to key beneficiaries including Metropolitan, Municipal and District Assemblies (MMDAs), traditional authorities, and the Office of the Administrator of Stool Lands has been delayed.
These lapses, participants said, are directly affecting development outcomes in mining areas and eroding public trust.
Trust deficit deepens amid delays
Country Director of NRGI, Patrick Stevenson, said the failure of revenue administrators to comply with the law had created a credibility gap.
“What has become clear is that the inability to follow through the law has consistently broken trust,” he said.
He noted that delays in disbursement have significant implications for social investments intended to benefit mining communities, particularly in areas such as infrastructure, education, and health.
According to him, the challenge is not the absence of a legal framework, but weak enforcement and administrative bottlenecks that prevent timely delivery of funds.
Questions over MIIF reforms and direction
Beyond the MDF, discussions also turned to the evolving role of the Minerals Income Investment Fund (MIIF), particularly following recent legislative amendments.
Stevenson said while reforms may allow MIIF to identify and invest in viable projects within the mining value chain, they raise critical questions around governance, transparency, and institutional independence.
“There are questions around the credibility of the governance architecture—whether it is transparent, accountable, and sufficiently open,” he noted.
Governance concerns and reduced funding
Executive Director of CEDA, Samuel Bekoe, pointed to recent policy shifts affecting MIIF, including a sharp reduction in its allocation of mineral royalties from 80 percent to just 2 percent.
He said the move raises fundamental questions about the government’s long-term strategy for the Fund.
“What does government want to achieve from MIIF?” he asked, noting that the revised mandate focused broadly on securing returns lacked specificity.
Bekoe argued that MIIF’s governance framework must be strengthened to reduce political interference and enhance operational independence.
He stressed that successful sovereign wealth funds globally operate with clear investment rules, strong oversight mechanisms, and regular public reporting.
Lessons from global best practice
Drawing comparisons with countries such as Norway, Chile, and Botswana, Bekoe highlighted the importance of clear fiscal rules, diversified investment strategies, and transparency in managing extractive revenues.
He suggested that Ghana could adopt a more structured investment approach, balancing high-risk, moderate-risk, and low-risk assets to optimise returns while safeguarding national wealth.
He also called for a reconsideration of MIIF’s funding structure, proposing a more balanced allocation model that ensures the Fund has sufficient resources to operate effectively as an investment vehicle for the mining sector.
Communities bear the cost
At the core of the discussions was the impact on mining communities, which continue to face development deficits despite the country’s significant mineral wealth.
Stakeholders noted that delays in royalty disbursement directly affect local development projects, limiting the ability of district assemblies and traditional authorities to invest in critical infrastructure and services.
These challenges, they warned, risk undermining the broader objective of equitable resource distribution and inclusive growth.
Call for transparency and accountability
There was broad consensus among participants that strengthening transparency and accountability is critical to restoring confidence in Ghana’s mineral revenue management system.
Stakeholders called for stricter adherence to legal timelines, improved coordination among institutions, and greater public disclosure of revenue flows and disbursements.
They also emphasised the need for continuous stakeholder engagement to ensure that reforms reflect both national priorities and community needs.
A system at a crossroads
As Ghana continues to rely on its extractive sector for revenue, the effectiveness of institutions like the MDF and MIIF will be central to ensuring that mineral wealth translates into long-term development.
For stakeholders at the forum, the message was clear: without stronger governance, timely disbursement, and institutional accountability, the promise of shared prosperity from mining will remain unfulfilled.
